BiggerPockets

5 Ways To Better Know Your Market

Getting to know your real estate market, or "farming area" as many call it, is one of the first things that every investor should take the time to do. Ever wonder how seasoned investors can come up with a number that's very close to the actual value of a house just by looking at it? It's because they know that area like they grew up in it.

So how do you get to know the market? Here are some tips:

1. Do as much research as you can on the area. Sites like city-data.com are awesome resources that you can use to get you started.

2. Take a drive through the neighborhoods. This will give you an idea of where the higher end homes are, the ghettos, and everything in between.

3. Pull over and walk around a bit! There's no better way to get to know an area than walking around it when you're not distracted with traffic, driving, etc…

4. If you see a house for sale or rent, give those numbers a call just to get a feel for what properties are listed for or will rent for in certain areas. Calling these numbers will also give you practice talking to sellers so that you can feel more confident when that deal comes in.

5. Talk to some realtors in the area. Some investors are for this and some are against it, but it can't hurt to pick their brains for information about the area.

However you do it, getting to know the area that you're interested in investing in is one of the most valuable steps that you can take. Many investors skip this step and then are confused as to why things didn't work out or they find out later on that their numbers were off. Doing a little research before you invest could save you hundreds or even thousands of dollars!

Where's the best place to start? Start out in your own backyard (I mean the neighborhood for all you people with literal meters out there…:))! Get out and have some fun, take the kids for a walk, or go for a walk yourself. You'd be surprised at the things that you miss that are right around where you live. Here's a short story for ya:

I pulled around the block to park in front of my house last week. I had to stop before I made the turn because I noticed that there was a rehab going on to a dilapidated house that's one street down from where I live. Now, I've SEEN this house before…many times obviously, but I'm so busy with my day to day errands that I failed to NOTICE that the house had potential. Had I NOTICED it and took the time to walk around the corner and check it out, I could have beat the current owner (most likely an investor) to it and made a little profit. It's amazing what he/she is doing to it, I wish I had pictures to show you. There is another rehab in progress right down the street. I did notice this one, but didn't act quick enough…My mistake…I will learn from it.

So, get out of the house, get some fresh air, and LOOK at what's around you. You never know what you might notice.

Comments

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  Marie Simon — over 1 year ago

  Thanks Nicole, this was good.

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  Susan McCormick — over 2 years ago

  Good point Nicole.

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  Darieal S. — about 1 month ago

  Hello, I'm new to the site and to the business, thanks for the information, it surely helped.