New to Real Estate · Houston, TX · Member since 2020 · 11 posts · 1 vote
Hey Guys! How can I figure out what real estate markets are good to invest in, if so what are some things I would want to look at to determine if the market is a good one to invest in.
Rental Property Investor · Washington, DC · Member since 2015 · 429 posts · 393 votes
6y
@Jasmine White here are some things you want to review when looking at potential markets:
1. Population Growth – You want a market in which the population growth is steady and ideally increasing. Definitely not decreasing! Basically, are people moving into this area or away from it? If you think about it, this is really a no-brainer. Why would you invest in housing in a city where people are moving out?
2. Employment Growth – Look at the employment trend in the area. Has unemployment been on the rise or has it been decreasing over the last 5 years? In other words, is there solid job growth? Positive trends in employment are a good sign of a growth market.
3. Diversity in Industry – What are the major economic industries in the city? Who are the major businesses, corporations and employers? Ideally, you want to see a variety of major industries and employers within the market, along with business moving into the area, as this is a positive sign that job creation and growth will likely continue. You will generally want to stay away from areas that are dominated by only one industry or only a few major employers.
4. Rental Trends – What have the last 3-5 years experienced in terms of rental trends in the city? Are rental vacancies increasing or decreasing? Is the city experiencing a growth in apartment buildings, or is it slowing down? Of course, for investing in rental real estate, you want markets with lower vacancies and ongoing demand.
The bottom line is that for a great real estate investment market, you want to invest in areas where the data show signs of current and continued healthy growth.
A few sources to find the data mentioned above include City-Data.com and censusreporter.org.