How do you go about analyzing markets?

Question

I’m interested in investing out of state. What are some good resources to learn how to analyze markets? What are your experiences and or processes?

Soh Tanaka · Answer

I put some questions you may want to ask yourself.

• Is the state/county/city laws/regulations/ordinances friendly to the landlords?
• Is the area expected to grow?
• Can you find properties that cash flow?
• Is the area safe?
• Will you be strategically diversified by buying in the area?
• Is the area depending on multiple industries?
• Can you find a good property management company or two?
• Is there any threat from the natural disaster?
•

Aaron W. · Answer

@Shaun Robinson Investing out of state is a great way to expand your search for great deals.

When considering a market, we look for trending growth in jobs, population, and income.

When trying to expand into a market, ensure you build a solid team whom you can trust to help you find, close and operate the properties you find. We put a lot of emphasis on finding the right property manager as they are your eyes and ears on the property and can make or break profitability based on how well they manage it.

Good luck!

Corby Goade · Answer

Great advice above, but I would also start by considering what type of returns you would like to see. Thriving and growing markets are likely give you higher quality tenants, higher appreciation and lower vacancy and higher property prices. Lower income areas are likely to give you higher cash flow, higher vacancy, little to no appreciation and lower purchase prices.

There are markets that provide a little of both, too. Personally, I tend to lean closer to the higher end, growing markets, because rents will rise over time and you'll have great cash flow later and you'll capture appreciation. In the higher cash flow markets, it's possible that property values will recede.

If you don't have high W2 income, building up equity over time is what will help you scale and provide you with freedom in the long term and that type of investing can be very passive if you build great relationships with partners in that market.

Best of luck!

Shaun Robinson · Answer

@Tesho Akindele That’s awesome! Thanks!

Soh Tanaka · Answer

@Deonte Palmer I don't have any specific sites to look for. This will depend on which state/area also.

Deonte Palmer · Answer

@Soh Tanaka it’s great advice I do have to ask do you know any sources that will lead me to that info. Or share where do you look to find certain things?

Tesho Akindele · Answer

@Shaun Robinson the best tool I found to analyze different markets is Vestmap. They use the DISCERN method to analyze different cities and even neighborhoods.

Demographic GroupIncomeSchoolsCrimeExpansion (Population & Income Growth)RentNeighborhood (indicator stores along with general research on business in target area)

Vestmap will show you information on all of those factors for every city in the US. The site was created by @Lee Ripma who is an out of state investor herself. This article does a good job of explaining the DISCERN method and other tips for out of state investing. Good luck!

https://www.vestmap.com/discer...

Jonathan Stone · Answer

@Shaun Robinson

Go to the BP website on a computer, I haven’t been able to acces via a phone even through the browser, the use the education tab. Then webinars. There should be an archive tab, that pro members have that allows you to see all of the previous webinars. I’ve found several of them useful myself.

Hope this helps.

Andrew Freed · Answer

@Shaun Robinson - I believe people have addressed most of these already but population growth, quality of schools, crime rates, diversification of job opportunity are all great criteria to determine a market. You can use city-data.com for a lot of this information and can even cross check property values and crime rate maps with certain areas which can help you find the perfect neighborhood. Best of luck on your search.

Aaron W. · Answer

@Shaun Robinson There are many resources online to help you research markets. BiggerPockets has some resources to show the market data discussed. You can also try other free sites like city-data.com and wiserei.com. There are also paid sites that provide more in-depth data and may be useful depending on how deep you want to dig.

Good luck!

How do you go about analyzing markets?

Most Popular Reply