Why the focus on the economics of real estate?

Often times, I have met real estate investors who want to purchase property and have many details covered about the renovations, location, price etc.  However, they consistently miss the single most important factor to succeeding in real estate and that is in understanding the unbiased economic fundamentals.

It is the economics of a region that drives valuations, rents, vacancies, renter profile, transportation etc.  Without an understanding of these important trends, the best property in the world would be ignored because there would be no potential for equity appreciation or cash flow.

The economics should be the first and foremost thing to look at investing in real estate. This will separate you from the speculators who are merely wishing prices to increase.