Real estate investing is all about perception. Your perception of where the market is going, along with where it is actually going. The goal, as always, is to buy low and sell high.

You want to buy a cheap tract of land and sell it as high-priced developed real estate, after it appreciates enough to make a nice profit. Selling property is an art in itself.

Buying an initial tract of land lends itself to some sound, rational guidelines:

First, look at the trend lines for home prices in your area. While most housing markets are in decline (and the Florida and California housing markets are adjusting after more than a decade of overvaluation), there are markets where home prices are rising. This is a decent leading indicator that there is a market for expansion.

Second, look for job-related news. Home purchases require a steady source of income. New employers moving to a city or a government branch opening are a strong indicator that good, well-paying jobs are likely to emerge. Where high-paying jobs take root, home purchases follow.

In relation to this, speak to your local city planning office. Are there recent “right-of-way” purchases to lay sewer lines? Is your local phone line making plans to run out of fiber optic lines, a “must-have” trend in new home construction? These things point to areas where home growth is imminent. Other big announcements are the issuance of school bonds (found in your local newspaper) and the opening of new parks.

Before looking at the lot, review the use of adjacent commercial real estate. Look for “family friendly” or “residential” commercial properties: Homes that are close to grocery stores and clothing stores tend to fetch a higher price than those that are further away. If there is a movie theater nearby, or plans for a primary or secondary school, consider the size of the houses you will build and what their amenities will be; buyers looking for those features look for “upscale” homes, with a little more space and two (or three) bedrooms for the kids. Other places to look are anchor stores like Wal-Mart and Best Buy. These companies spend millions on purchasing pattern surveys before purchasing a store location; If you’re buying a parcel of land, you have a one- to one-and-a-half-year window to search for nearby single-family residential and rental residential real estate.

You can even turn this around: If you can talk to a group of commercial real estate investors, building a shopping center as a hub for the housing development is also a viable combination strategy. This also applies to highly urban areas. Many downtown areas that have been abandoned by businesses may be converted to apartment buildings, and some of the older housing projects are being razed for mixed-use spaces with combined commercial and residential areas. In particular, you can often get block grants to help finance projects like this, and there are HUD programs that can help a lot with “urban renewals.”

Another source to research is the demographics in your area. Look at the US Census figures (and local county figures) for median age and median birth rate per capita. You want to invest in areas where the population is already growing. The high biases in the 40s and 50s indicate that there are many people who will retire soon, and retirees are very likely to sell properties. The places to watch carefully are most of urban California and large swaths of the rural Midwest, where demographic trends have been changing entire cities since the 1950s as the country’s population has moved into urban areas. .

If there is a local planning council or urban development council, be sure to get the minutes of all the meetings from the past year. The city council offices will have them on file as a matter of public record. Also try to enter the following range of meetings as an observer. Talk to city and county managers where they see housing and construction trends moving. What you are looking for is real estate that will be desirable in two to three years; Consult highway planning atlases and look up all the data you can find. Also look for real estate that’s scenic: Lakefront property is about as close to a guaranteed bet as you can get in real estate investment, especially if there’s a lake that’s at the “far end” of a development axis. Similarly, if there is land that the council is looking to acquire for parks, buying the adjacent lots now means you can sell them later.

Finally, talk to professionals in your communities. Talk to architects who can tell you if they are busy or not. Maintain professional contacts with engineers, bankers and lawyers. They will usually know about the projects long before the general public. Also make it a habit to read the business section of the local newspaper. Often times, the first clue that a business may be moving to your area is hidden at the bottom of a column on page 8.

Using the suggested guidelines above will help you find “sleeper” virgin land properties. These “sleeper” properties are perfect for the buy low, sell high strategy used by successful commercial real estate investors.