How do you properly and efficiently analyze a market?

4 Replies

There are a lot of variables when it comes to the state of a market you will potentially be investing in. Values, businesses moving in or out, schools, up and coming developments, nearby colleges, crime rates, ect. Does anyone use a systemized way or strategy for analyzing a market to see if it is good for a certain strategy; REOs, Rentals, ect.? There's nothing wrong with investigating all of these variables one by one, I just imagine that there is a time efficient way to do it.

Most people from what I see invest in markets bc its the new sexy thing to do.  All of the different markets have things that make them desirable.  I always find it fascinating when someone states they are buying in a market for the appreciation factor but then buy a cheap home in the hood.  

Originally posted by @Curt Davis:

Most people from what I see invest in markets bc its the new sexy thing to do.  All of the different markets have things that make them desirable.  I always find it fascinating when someone states they are buying in a market for the appreciation factor but then buy a cheap home in the hood.  

I agree, a lot of people are becoming REI "bandwagon fans." Thus making it harder for the serious inexperienced investor to get his or her foot in the door and taken seriously. Im curious as to how you analyzed the Memphis market and decided that it was in fact an attractive market for what you wanted to do and exactly where to invest and in turn developed buying criteria accordingly?

I buy for myself here an I also sell to out of state investors.  

Crime is higher then some may like here but there is also many other positive factors that to me out-weigh the bad.  

Many companies have their world hq here. 

almost 50% of the population rent making there always tenants looking to rent. 

Price to rent ratio is good.

Omari,

Your questions have crossed my mind many times while working toward my first investment purchase. I'm nearly finished rereading a book written by Ken McElroy "The ABC's of Real Estate Investing" for the second time. In this book he specifically discusses evaluating your market, sub-markets, where to look and what to look for.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.