Hello all, hope you're all having a great day. I'd appreciate any tips on how to evaluate a local market and from that information determine the best niche and strategy for that area. I'm looking to getting into a buy and hold strategy, rolling over the equity after a year or two with a 1031 tax exchange upgrade, but I'd like to hear everyone's tips on how best to evaluate their local market and determine the best niche and strategy for that area. From your tips and suggestions in helping me evaluate my local market, I'll either adjust my short-term strategy for my local market or evaluate other nearby local markets to pursue my buy and hold strategy. Thank you all for your advice in advance.
Buy and hold can be done anywhere but best in growth or up and coming markets IMO. You want to look at the number of industries, employment rate, average income, and population. I like areas that have hospitals, university, financial institutions and technology because I know these people can afford to pay me. Transportation is an added bonus. Some will also consider taxes and eviction process. The lowest I will go is in a class C neighborhood because I am not ducking bullets. However, some people make good money in D class areas, its just not my preference.
@Lelith Walker thank you for your opinion, I'll take your advice into consideration. How do you determine whether the area is an A/B/C/D type?
My definition may differ from bigger pockets
Class A is richer tenants ceos to upper lever managers, sometimes newer buildings like 15 years old or in the case of NY just extremely well mainained updated buildings, latest amenities
Class B is slightly older buildings, well maintained, a little outmoded, tenants are normally professionals like mid managers
Class C is working class and buildings need some renovation
Class D war zones a lot more concentration of crime, tenants normally are not working and some will tear up the building
@Lelith Walker Thank you for your definitions on this. I appreciate it.