If you were asked you to perform an in-depth market research analysis for single family investment properties in a market you were unfamiliar with, where would you start and what processes would you employ to acquire data regarding which neighborhoods would offer the best return and stability?
@Lindsey R. I can share with you the way I do it here in the Pittsburgh market. Hope this helps. Because I have access to the MLS I first will pull up comparable sales within a few streets of the subject property. You could use the web to find recent sales if you are not a real estate agent. Next I would do a google street tour of all the comparable sales to compare how the street looks and the curb appeal was for each property. Also try to research and compare square footage of each property.
@Lindsey R. What is the goal of the market research? For single family, I would look closely at comps. You can use zillow or trulia websites. There are other website that offer similar services. They will provide you some good guidance. Also, if you know the particular county, you can look at the county website and run queries there to pull data.
@Lindsey R. You don't mention if your strategy is to fix and flip or buy and hold, and whether the investment area is out-of-state or just in neighborhoods in Los Angeles (being from Los Angeles, I know that areas can be three hours across!)
I'd definitely join a real estate investment club in the market you are looking to invest in. Even if it's long-distance, they will have forums and online resources where you can get a good overview of different areas the way investors see them.
I echo the statements of others in saying that you should look at comps in getting a feel for what areas are valued at, however I can also see your conundrum in that you need a birds-eye view to start and then narrow down areas.
My biggest suggestion would be to look at the Redfin blog and then Data Center on Redfin. It supplies a wealth of information on a housing market data for a city or even a zip code. For an overview of information on market trends, crime, etc, you can try Trulia local scoop section.
For comps, if you don't have access to a realtor who can pull them for you, I always recommend Redfin if it's available in that area, as it is a brokerage with direct access to the MLS and so data is updated every 15 minutes or so. I often combine Redfin with Zillow comps because between the two of them you get a pretty well-rounded picture of the property data.
I wrote a BiggerPockets blog post on how to find comps and calculate ARV that you might find useful: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value
Feel free to reach out if I can help with anything else.
I would first see how many other people have already gathered and run all of that data. See if it already exists somewhere so you don't have to reinvent the wheel.
Outside of that, or as part of that, my tactic has always been to find people who are much smarter than I am on running that kind of info and piggybacking off of that (of course with my brain attached to ensure I believe what they are telling me).
Then outside of that, if you really want to do it all yourself, I've always believed property managers are the absolute best people to ask when it comes to rentals. They know the specific neighborhoods and streets best, the rentability of all the areas (which is key), and where the best chance for stability might be...since they are often the ones dealing with it. They may not necessarily be able to speak to to the direct numbers/returns, but you can run those yourself when you see some properties in the various areas.
What are you hoping to do? Is this for your own personal investing or something else?
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