Look for a new market, run the current numbers for currently used markets, and rerun the numbers for previously eliminated markets...to see if they are still out of the picture.
Situations change, markets change, so you must follow the changes and adjust.
I believe knowing the facts and as many of them as you can on a Macro level of a market. Such as, what is driving the economic growth - which businesses are moving to town, where are apts being build within the market, which part of town is growing the fastest. I also believe that you have to trust yourself and come to your own conclusion based off of research that you have read. This is how you beat others to a market (I think).
- V/R Troy
I focus on the numbers...the ones that really mean something to an investor...not a homeowner/tenant. For instance, I don't research the typical economic factors like growth, freeways, shopping nearby, population, etc... Are they important? Yes. So why don't I follow them?
Here's why. I let the numbers tell me if they are important to the people buying/renting there. The numbers I speak of are the ones with "$$$" in front. Higher rents, higher ARV's, higher AP's, higher cash flow and profit potential on spreads are the numbers that matter most to me. Those numbers, are the buyers/tenants telling me if and how important the rest of those numbers are to them...and that's all the really matters.
If you are buying commercial, depending on the type, those other numbers will matter. When buying residential, they are impossible to interpret. An example would be a connection between businesses increasing and that impacting population growth in the area. Which comes first? Does it matter? Do people live in the same area...even the same city...as the work in?
Schools. Are they important? Yes. However, many of the best school districts have cost to buy out of the range of most buyers. If you focus on that, you are eliminating a large portion of your renters...and if your renters are single,...?