In real estate, you know that location matters, right? Of course you do. So, how do you evaluate markets?
Whether it’s the one you live in or one a thousand miles away, you need to be able to analyze a market to see if it’s a good fit for your purposes as a real estate investor.
Here are the best and fastest ways assess the housing market in a given location.
How to Do a Real Estate Market Analysis
City-Data.com has loads of information. Demographics, crime, statistics, weather, real estate—you name it, they’ve got it. It’s a great indicator of the big picture of a certain location, which you can use to compare it to other markets that you may be interested in investing in.
Some stats may not be up to date, but with 2020 census data being collected this year, expect more relevant information in the near future.
Anyone who has kids, or who plans to have a family, has a very keen interest in living in a good school district. Many times, this is the driving factor for purchasing a home or finding a place to rent. Everyone wants to get their kids the best education available, so this is a key metric to measure.
There are many websites out there that rank schools and school districts. Sites like Niche.com, SchoolDigger.com, and GreatSchools.org are fantastic places to start.
3. County Seat
Every county has a county seat, where the local government is located. I didn’t realize it until recently, but most of our properties in the several markets that we’re in are located in the county seat. This is a good thing!
With more local government services, come more jobs and more money. Other businesses service these jobs and people. And people who work in the local government or any of the supporting businesses typically prefer to live close to work. Fo all these reasons, it’s usually a good place to own real estate?
I have a hunch, as well, that county seats may have better schools. That’s just an educated guess—I’d love to hear your thoughts in the comment section!
4. Things to Do
When you’re not working, I’m guessing you like to do other things. True? So do other people!
When evaluating a market, it’s important to look at amenities available to the local population. Are there adequate parks? How about restaurants, entertainment, and shopping?
If it’s an area that doesn’t have much opportunity to explore, keep in mind residents (and therefore your tenants) might devolve into some “questionable” hobbies instead.
BiggerPockets—duh! Do you have your keyword alerts set up yet? If not, do it now!
And search the forums, ask questions, and get to know markets from other investors’ experience. Now, more than ever, it’s easier to gain insight from other people who have boots on the ground and lots of experience.
6. Zillow & Craigslist
These are great tools to get a sense of a local market. What’s available? What are the prices and rents? How long does it take to sell a property?
You can also figure out what level of rehab a buyer or tenant is expecting. In some markets, it’s going to be higher-end; in others… well, not so much.
Many people over-improve properties, which is a mistake. Take a cue from the local market, and find out what people want and expect so this doesn’t happen to you.
7. Planes, Trains, & Automobiles
Evaluate the larger infrastructure of a market. Is there access to transportation within a reasonable distance? The closer you are to airports, trains, and major highways, the better. Many higher-paying jobs depend on having access to these types of transit.
8. Google Maps
I love technology. Now you have the ability to visit anywhere! Just type in a city or address, and you are virtually there in no time.
Drop that yellow guy on the map, and take a stroll through the neighborhood. It’s a great way to start learning about a local market.
One caveat: some of Google Maps’ data are outdated, so make sure you take what you see with a grain of salt.
What else do you use to evaluate a market? Any tips or tricks to share?
Share in the comment section!