Newbie investing: How do I study my prospective market?

Question

Hi, Everyone! :D

I'm a brand new, aspiring real estate investor, and I'm super excited about the path that lies ahead! I realized this was the path for me after my eyes were opened by the amazing Robert Kiyosaki. :)

I currently live outside Pennsylvania. For several reasons, I'm planning to relocate to where I grew up - and where my family is - in Michigan. That's where I'm planning to begin building my real estate portfolio. I have two questions about researching that market:

-What pertinent details do I need to ascertain about that region's housing market in order to be well prepared to invest in it?

-Which tools are most helpful for ascertaining those details?

Thanks so much for your advice! I appreciate your guidance. :)

Justin

Basit Siddiqi · Answer

@Justin MegnaPick a market that you want to invest in and become a master of how much properties sell for in that area.Look at Zillow and check out properties sold in the past 90 days.

Justin Megna · Answer

One more question...

In the video I shared above, Anson Young says he likes to search for real estate deals in cities of 100K-250K people, since that level population supports demand and there's less competition than in the major cities. I started researching the county where I grew up in Michigan, since that's where I was planning to start building my real estate portfolio. I quickly realized that the entire county's population is 150K. There aren't really any cities, just towns. The most densely populated are just over 10K people.

Could I have trouble trying to build an investment portfolio in a county with this small a population? Do you think it would be better to start elsewhere?

Thanks for the feedback!

Justin Megna · Answer

Thanks for the replies!

For other newbies, I also discovered this great video from Bigger Pockets about market research:

Michael Dumler · Answer

@Justin Megna this may sound broad, but study every factor/variable that may have an effect on your investment strategy and specific target market. I find it extremely important to know and track your numbers on a consistent basis. Learn housing metrics such as, average SFH sales price, average vacany rate, lease comparables for different properties/subdivisions. Study potential economic trends like, new job growth, relocation of companies, overall increase/decrease in employment . Look into local governmental policies, for instance, laws that may regulate/cap rent, property tax increases, different zoning laws that may hurt or help your strategy in the long run. All of this info can be sourced from online platforms and articles, real estate investment meet-ups, and general networking with folks in the industry.

Maybe studying all of this is unnecessary, but at the end of the day, the more you can perceive change in the RE space, the better you can adjust your strategy and criteria to profit in the market. Hope this helps.

Cameron Braig · Answer

@Justin Megna

Congrats on getting started and the move close to family. When it comes to geographic metrics items like job growth, rent growth, employment diversification, local landlord laws/regulations and population growth. There are others that I'm sure other people will responds with these but these are typically good places to start when looking at specific metros. Best of luck.

Justin Megna · Answer

*I live outside PHILADELPHIA. :)

Newbie investing: How do I study my prospective market?

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