From an investment perspective, what is often the best strategy according to the theory of progression?

According to the theory of progression, purchasing the cheapest house on the block is often seen as the best investment strategy. This theory posits that properties are influenced by the overall value of surrounding homes. When someone buys the least expensive home, they benefit from the potential appreciation in value as the surrounding properties increase in worth. This can be due to various factors, such as improvements in the neighborhood, rising demand, or general economic growth in the area.

Investing in the least expensive property positions an investor to capitalize on the "pull-up" effect created by the higher-valued neighbors. As those properties appreciate, the least expensive home can also rise in value, potentially yielding significant returns when the property is sold or refinanced.

This method stands in contrast to strategies such as investing in the most expensive house on the block, which may not enjoy the same level of value appreciation if the surrounding properties do not offer similar market strength. Additionally, while investing in newly developed neighborhoods can also offer potential benefits, it comes with risks, such as uncertainty regarding future development and market demand. Purchasing a rental property may lead to immediate income, but it does not guarantee the same level of appreciation related to the theory of progression comparing it to the cheapest house scenario.