Understanding The three Types Of Real Estate Markets: Primary, Secondary And Tertiary

 Understanding The three Types Of Real Estate Markets: Primary, Secondary And Tertiary

if your goal as a real estate investors is to maximize your success you pursue this goal then the first thing you should have is to keep an open mind about the markets you’re pursuing and to expand your horizons when it comes to making real estate deals. Some Investors try to stick to a market, but here are some tips and tricks for expanding your portfolio into other areas.

What Is A Primary Market In Real Estate?

In real estate, primary markets are the largest housing markets. Primary markets, also known as gateway markets, include large, dense population centers with long-established commerce and industry.

What Is A Secondary Market In Real Estate?

Secondary market real estate refers to cities that are slightly smaller than primary markets, with populations between one and five million. Secondary markets have slightly less economic activity, but are typically growing in terms of commerce, industry and population.

Secondary markets are attractive to individuals because they offer many of the same amenities and features as primary markets — while being more affordable and less densely populated.

What Is A Tertiary Market In Real Estate?

The line between secondary and tertiary real estate markets can be a bit blurry, but tertiary markets are typically even smaller than secondary markets, with a more spread out population. They may have a smaller urban center and more suburban areas.

These tertiary cities may have fewer amenities than secondary and primary markets, but they still attract renters and homeowners because of their affordability and quality of life. 

There are tons of tertiary markets. Some cities that are small could still be considered lucrative tertiary markets to invest in.

Top 3 Benefits Of Investing In Secondary And Tertiary Real Estate Markets

1. Affordability

One of the main obvious benefits of investing in smaller secondary market real estate opportunities and tertiary real estate markets is affordability. Commercial real estate in primary markets can be prohibitively expensive, especially because primary markets draw a lot of international interest. When it comes to primary markets, you’re going to be competing not only with local investors, but with individuals across the country and abroad.

It can be very difficult to break into a primary market and find success, so can look into smaller secondary market real estate options and even tertiary cities.

2. Growth Opportunities

In recent years, there is evidence that people are moving away from larger urban centers. Where do they move to? Smaller secondary and tertiary markets, of course. .

This shift, sometimes referred to as an “urban exodus” points to many new opportunities in cities that are smaller but are experiencing rapid growth. Don’t discount a secondary or tertiary market — these cities may be the perfect place to invest in real estate especially landing banking.

3. Gaining A Point Of Reference

Oftentimes, you can look to primary markets to get an idea of what commercial real estate trends will appear in secondary and tertiary markets. This is a huge benefit for those of who have investments in these smaller markets, as they can get an idea about what’s happening on a larger scale and can make more informed decisions about their investments and properties.

Investors in primary markets shoulder more risk, in a way, because they have no larger market to look to to predict shifts in commercial real estate trends.

As with most aspects of commercial real estate and property investments, there are no right or wrong answers when it comes to choosing a market. Whether you’re interested in large primary markets, secondary market real estate opportunities or tertiary real estate markets.