Real Estate Investing Basics

The Secret to Buy & Hold: How to Squash Vacancies by Understanding Demand

Expertise: Personal Development, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Business Management
42 Articles Written

If you want to be exceptional in buy and hold investing, there is one thing you have to do: Spend less time shopping for good deals and more time understanding what people really want.

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Let’s face it, people pay for what they want. If you give them what they want, you get paid. Even if you save a lot of money or get a good deal on a house, it won’t matter unless someone wants to pay you for it.

Imagine how easy it would be having 20-30 applicants every time you post your rental. You could pick only the best tenants, charge whatever you want and never have to spend time or money advertising. Renters will beg you to take their money. It’s a beautiful thing.

I’m going to tell you exactly how to figure out what people want so you can be exceptional and not waste time, effort or money on a “good deal” that will cause you a lot of trouble later. It all comes down to demand.

Related: The 6 Dumbest Mistakes You Can Make as a Buy and Hold Investor

How to Determine Short Term Demand

Find out what people want right now.

  • Call every local rental agency/apartment complex and ask how often 1, 2 and 3 bedrooms become available. If all 3 bedrooms are sold out around town and they don’t come up often, invest in 3 bedrooms. That’s what people want.
  • Call Craigslist ads for different sized homes in an area and ask how many applicants they usually have and how often they have vacancies. Most landlords are happy to share their experience with you. Let them brag a little.
  • Put up several Craigslist ads with different types of properties you were thinking of investing in and see how many people reply.
  • Find the most expensive rentals and see how their vacancy rates compare to cheap rentals. Is there a need for high end rentals or more affordable rentals? Buy what people demand.

How to Determine Long Term Demand

Real estate is anything but static. It's a fast paced roller coaster ride that's always changing. If you understand how it works, the bumps and dips will be exhilarating. So how do you know what people might want in the future?

  • The U.S. Census will give you statistics on all population demographics and even rent vs. own and vacancy rates for an area. It’s all done for you. Have a look at how the population and economics are changing over time. How will your rental meet that demand? How will the changes impact rental rates and property values in the years to come? What do you need to do to stay on top?
  • Go to your city’s website right now. Are they giving incentives for low-income housing, small business start ups or even residential and multi-unit construction in a certain area? Are they changing the zoning to encourage growth? Check for recently issued building permits. What are the permits for, who applied for them and what does that mean for the area? Look at the proposed general plan. How is the city changing to meet the expected demands of the future? What can you do to stay ahead of demand?

When is Rental Demand the Highest?

Knowing when most people move in your area is also important. In general people move in the spring and fall. Make sure your leases start and end during these prime times to increase the demand and optimize prices. I do college housing and if a lease ends a week before classes start, I can get 25 calls an hour after posting it. If the lease ends mid-semester the phone is silent.

Related: How to Choose the Right City for Buy and Hold Real Estate Investment

  • Call a property manager/apartment complex, and ask when they have the most vacancies.
  • Call landlords posting houses for rent online and ask when demand is the highest and how many applicants they usually have.
  • Look at the local population and economy. Is there a time of year that people are more likely to move? Why?


The most important thing you can do when investing in real estate is homework. It’s all supply and demand. The steps above take a few hours to complete, but the benefits last for the rest of your life. Don’t get into the trap of looking for good deals. Find out what people want, then look for good deals.

To stay on top you’ll have to do these steps every year. Put it in your calendar right now so you don’t forget. If you stay ahead of the competition and give people what they want, you’ll always be exceptional.

How did you decide which buy and hold properties to invest in? Do you research your market demand extensively before you buy?

Leave a comment below, and let’s discuss!

Brett Lee is a licensed Real Estate Broker in Portland Oregon where he helps people achieve a better future so they can do the things that truly make them happy. Brett is also a buy-and-hold invest...
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    Bhekizwe M. from Bulawayo, Zimbabwe
    Replied over 5 years ago
    Thanks for sharing.i am researching alot to find what is in demand before buying into “good deals”.The market gives feedback.Its supply and demand as you point out
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied over 5 years ago
    great post and advice Brett! I’ll definitely implement this before buying a rental property. Supply & demand is the best way to get a head and stay profitable. Sometimes I forget that one needs to keep things simple and not over analyze and over complicate things. Any advice on analyzing a deal to figure out cash flow?
    Tim Hoffman Investor from Rockford, Illinois
    Replied over 5 years ago
    Not sure I can advocate advertising on craigslist for a 1, 2, 3 Bedroom if you do not have anything to rent. Unless you are upfront and say you are doing market research or you are willing to go and find a home for the right person (I do not recommend this as a highly used strategy). I also an not so sure most landlords will tell a cold caller what their market info is. While I may tell my landlord friends and others from my landlord association, but if I got a call out of the blue from someone who asked me a bunch of questions about what I have available, what I am getting calls on and so forth, I would quickly end that call. My time (and the time of the people you are calling) is valuable and unless you offer something you should not expect a lot. I do agree with buying what will rent and what people want. However, that is a moving target. When school is out (or coming to the end of the school year), you would expect to see a higher demand for 3 and 4 bedrooms. When school is in and families are not as likely to move, you will see a higher demand for 1-2 bedrooms. Just my two cents.
    Aleksandar P. Investor from Chicago, Illinois
    Replied over 4 years ago
    Great points!
    Tyrone Maxwell Real Estate Agent from Baltimore, MD
    Replied over 5 years ago
    If you don’t ask most likely they wont tell and if you do ask most likely they will tell. You may not get the answer or any answer for that matter but if you don’t ask you wont get any answer.
    Syed Kamal
    Replied over 5 years ago
    I consider myself a buy and hold investor. I would like to learn more about a niche market. Furnished rooms for better quality short term rental (less than 6 months). I hate traditional rooming houses. What kind of property is most suitable for it. Where to find them. How to establish the local bylaws governing it. How to gauge demand for it. How to find financing for this type of property when you don’t have employment income for a mortgage. How to into such a property with 5-10 % down. Any guidance will be appreciated from seasoned operators.
    Brett Lee from Portland, Oregon
    Replied over 5 years ago
    You have to have a good realtor willing to run calculations for you. Find one that invests because they will know how to do it. If you need helping finding that person give me a call and I will help. Don’t use someone who can’t answer these questions.
    Jonna Weber Real Estate Agent from Boise, ID
    Replied over 5 years ago
    Brett – nice points! This is important information to know – more important than many other factors others spend a lot more time concentrating on. There is one point that I disagree with, and that is with is posting ads on Craigslist for properties you don’t own/manage. There are so many scams going on Craigslist with rental properties – I don’t want to contribute to propagating more misleading ads. To me, it hurts the credibility of the site for posting legitimate vacancies. Just my 2 cents!
    Karen Rittenhouse Flipper/Rehabber from Greensboro, NC
    Replied over 5 years ago
    Hi Brett: Absolutely right, to be the most successful, you must target to your audience. We started out buying houses for the $700 per month rental thinking that’s where tenants were. We then put survey questions on our website and found that, in our area, most tenants were looking for something in the $1200 per month range. In one month, we changed what we were buying from $100,000 properties to $200,000 properties and couldn’t buy them fast enough. Most were rented before we even closed on the purchase. Survey on our website was the trick for us and be aware that what people wants changes with the economy. We, in the beginning, way underestimated our market. Thanks for the post.
    Brett Lee from Portland, Oregon
    Replied over 5 years ago
    Karen, A survey for renters, amazing idea. How did you get it out to renters? I want to do the same.
    Krystle Little Real Estate Investor from North Carolina
    Replied over 5 years ago
    Great article Brett! I see that it is very essential to finding out what the clients want instead of what we feel is best to purchase/rent. I’m a new investor and I plan to buy and hold property in the future. This information has been very helpful, thank you!