Market research michigan
Member since 2022 · 42 posts · 14 votes
Market research michigan
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes@Ian Hutton what you're doing is great, but probably overkill.
If you're investing in Lansing, you could do this once, but then you'll learn so much more by being hands-on and networking.
How many rentals in Lansing do you actually currently own?
Logical Property Management4.9458 Reviews
11 Replies
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Ian Hutton what you're doing is great, but probably overkill.
If you're investing in Lansing, you could do this once, but then you'll learn so much more by being hands-on and networking.
How many rentals in Lansing do you actually currently own?
Logical Property Management4.9458 Reviews - 1yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesAs Drew said, this is overkill...and you're missing a few things as well. First thing you're missing is zip code really doesn't tell you much. There will be at least 10 to 20 micro-markets in every ZC. All different.
Quote from @Ian Hutton:
Hey everyone,
My question is what are the key components you look for when doing market research? I’m curious if I’m missing anything to my list so far I have (per zip code) also I currently invest in the Lansing area.
Projects in the next 10 years (expected start and end date)
Average household income
Crime score
Average home price
Population growth past 10 years
Who are the major employers
And vacancy rate
Job growth
Tenet demographics
& government and taxes
Here are some of the things you listed that don't really do much, and why:
Projects in the next 10 years: When people lived where they worked this was important. Most people commute, or work out of their home (not the same thing as living where you work).
Avg. household income: This is usually a result of the market rather than dictating the market. In other words, the avg income can be anywhere, and not tell you if the market is worth investing in.
Avg Home Price: This is important. The sales comps dictate the current value, but again, this must be more specific to a micro-market and specific to the size of the home.
Population growth...: Means nothing. This can change so fast in either direction that basing your REI decision on this is just guessing.
Major employers: Most people don't work where they live. They either commute or work out of their home. Working out of your home is just another way of commuting, just digitally.
Job growth: See above.
Tenant demo.: These numbers tell you very little about the future.
Missing:
Insurance, rent rates. These are specific to the size of the home. - Member since 2022 · 42 posts · 14 votes1y
I agree actually that zip codes can be misleading in terms of a neighborhood by neighborhood basis. Is there anyway to analyze a neighborhood on a more micro level? (Example city data.com or something) or does this need to be looked at by a house by house situation then add up the averages? I’d like to begin having a data map of what neighborhoods meet my investing criteria.
- 1yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesYou have to analyze the immediate neighborhood for its own data. Yes, this can take time, but you really need to do this in order to "know" it. Just reading data sheets will teach you nothing about that area.
Quote from @Ian Hutton:
I agree actually that zip codes can be misleading in terms of a neighborhood by neighborhood basis. Is there anyway to analyze a neighborhood on a more micro level? (Example city data.com or something) or does this need to be looked at by a house by house situation then add up the averages? I’d like to begin having a data map of what neighborhoods meet my investing criteria.
Unfortunately, I never found a source that isn't some type of shortcut grand summary. I ended up designing my own
- Member since 2022 · 42 posts · 14 votes1y
@Drew Sygit so far just the one, lol still new to investing but wanted to be ready for my next deal while I build up funds.
- Member since 2022 · 42 posts · 14 votes1y
Analyzing a neighborhood, would this be a house by house basis to get an idea of the rent, insurance cost, property taxes, crime, and school district?
- 1yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesSchool district doesn't follow quality of REI. The numbers that matter, are the ones that apply to each property, in the same size range, in the same area (small), with $$$ in front, not %%% in back.
Quote from @Ian Hutton:
Analyzing a neighborhood, would this be a house by house basis to get an idea of the rent, insurance cost, property taxes, crime, and school district?
- Real Estate Agent · Lansing, MI · Member since 2016 · 143 posts · 78 votes11mo
Some of your questions are going to vary by manager, management style, neighborhood, school district, etc. I own over 100 units in Lansing, we self-manage and I am a local broker/agent, helping investors invest in Lansing. I've answered some of your questions below.
Projects in the next 10 years (expected start and end date) - There are tons of new projects being talked about in Lansing. Some big skyscrapers are being planned for downtown (https://lansingdowntown.com/new-vision-lansing) and the south side is seeing developments as well (https://www.lansinggrowthfund.com/). The city wants to invest in more urban areas into larger projects and the hope is that the surrounding neighborhoods will grow in desirability and demand.
Average household income - Most of Lansing renters are blue collar support workers. There are tons of manufacturing, insurance, healthcare and support workers for colleges and government jobs.
Crime score - check out crime mapper and other sources to look at the specific neighborhood you've targeting. There are good prices, and good areas, sometimes these overlap, sometimes they don't. Talk to a local professional to get more specifics on this one and try to drive the area if you can to figure out where you'd be comfortable investing.
Average home price - The average home price is $160k in the City of Lansing. There are TONS of opportunities to buy properties cheaper and rent them.
Population growth past 10 years - depending on your source, you should see stagnant growth, a slight uptick or a slight decrease. Overall, being a capital city, certain jobs will never go away.
Who are the major employers - State of Michigan, GM, Hospitals, LCC, MSU, Auto Owners, Farmbureu, etc.
And vacancy rate - 5.6% according to a quick google search. Ours is between 5-10%. Some of that is on purpose because we inherited tenants that we didn't want or because we had planned improvements scheduled. It also depends on your management style, old guys like to never raise rent and never have a vacancy, newer investors like to push the limits of what rent they can get, and as a result, often have higher vacancy. There is middle ground based on what your goals/needs are.
Job growth - Lansing has experienced positive job growth for the last 5 years, there are tons of municipal construction projects driving a lot of contractors to the area that need housing. The new McLaren hospital on the east side of Lansing was recently built providing 28,000 jobs to the area.
Tenet demographics - 46% of residents in Lansing are renters.
& government and taxes - Ingham County is not the most landlord-friendly place, but other areas are far worse. We have code compliance required every few years and the city's goal is to avoid slumlords, which is a good thing. Evictions take longer than they should, but overall, with good management and a good property, most of these headaches are minor. Property taxes are more affordable than in other capital cities and overall, I don't think are cost-prohibitive for making an investment.
In summary, I think Lansing has a long-term way of providing steady returns for investors due to the diverse employment landscape and it is a great place to invest.
- Rental Property Investor · OR · Member since 2015 · 8 posts · 3 votes11mo
Hi Ian,
In 2020, once we had finished our market research and settled on Jackson, Michigan. We flew out to Jackson and looked at the town and area. It really helps to see places in person. We fell in love with the town. At the time we were living in Washington State. (We now live in Oregon) Anyway, we looked at the industries and talked to different people who lived there about the different areas near the downtown to invest in. They were rejuvenating the downtown area and streets. We looked at the infrastructure and decided it was going to continue to grow. I think it is a great place to invest. We bought and rented 10 multiplex properties there. We now are selling some of them to invest in other places.
~ Lindy
- 11moJohn DudasPro MemberReal Estate Agent · Adrian, MI · Member since 2015 · 39 posts · 2 votes
@Lindy Gaskill I live near Jackson. What kind of multiplex properties do you have to sell? Apartment buildings or triplex homes?
Which end of Jackson? Was it what you expected after your research?
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