“Last week I was supporting my family by picking up aluminum cans along the highway. Today I’m a real estate magnate!” Though the details may differ, this is actually a fairly common statement – and it’s one that could very well be true. So if there’s so much money to be made in real estate, why isn’t everyone getting rich? The reasons are simple – it requires capital or initiative, and every potential gold mine is also a hole in the ground that may eat up your entire investment, leaving you with nothing more than a hole in the ground!

So how do you get rich investing in real estate? Unfortunately, nobody can answer that question. Not because it’s a secret, but because a single method that will work anywhere and can guarantee you incredible profits simply doesn’t exist. What works for one person may not work for you. Amount of investment, area of real estate knowledge and even intuition each play a role in your real estate investment endeavors. Take a look at speculation as a real estate investment method.

Speculation is an awesome opportunity for the real estate investor. You see a pretty tract of property and know that someone, someday, will want to develop it. So you buy it for a song and wait. You may wait a year or two, or even a decade before this investment pays off. Typically, when these types of speculation pay, they pay big. So what could possibly be wrong with this investment practice?

Put very simply, you can miss. I knew someone who was certain that a small town was going to be growing in a particular direction. With two college campuses and a total population of only about 12,000, there were bound to be growing pains. An established community on the north would serve as a boundary. To the east was a river (with typically river bottom land) and to the west was land that was less suited to development. The natural direction for growth was south. The Interstate and Wal-Mart chose sites to the west and the land to the south of town continues to be farmland. Lucrative, but not at all what the investor imagined.

So how can you be sure the property you choose for your speculative real estate investment is a good deal? If there were a way to do that, you would truly have the secret to real estate success. But there are some things you can do to tip the scales in your favor.

If you’re looking at property that would likely be developed except for the fact that it has no city services, talk to city officials about the potential of running those services. It could be that the city plans to do that at some point, and may even be able to give you a year when the project is going to be budgeted. Remember that plans change, but this could give credence to your idea that the property would be a good investment.

Pay attention to neighborhoods. If there seems to be a trend of “fixing up” in a particular neighborhood, it’s a good sign that rental property will probably be more in demand. This is often a great time to purchase property that needs work and do some repairs.

Watch industrial and business trends. Large businesses and small to medium industries tend to flock together. Property near growing business and industrial areas could be in demand as more companies want to settle there. Check for available water, sewer, gas and other utilities first.

Finally, intuition is great, but evaluate the source. Sometimes, it’s more difficult to be objective about an area because you’ve always considered that to be a “slum” area, or undesirable property. Take a fresh approach and be sure you’re evaluating the property and it’s potential, not your own prejudices.