Which Areas Rent Fastest? Building a Tool to Find Out—Help Needed!

Question

Hi All,

Just incase you don't make it past this sentence, my first question is.. DOES THIS EXIST?

Summary: I’m currently working on a project to analyze rental market trends and help real estate investors, landlords, and property managers identify high-performing areas. My goal is to build a data-driven tool that provides actionable insights into which neighborhoods and property types are in the highest demand, based on metrics like:

• Time on market: How quickly rentals are being leased.
• Property characteristics: Bedrooms, bathrooms, size, and amenities.
• Pricing trends: Rental rates relative to market demand and property features.
• Visual quality: Leveraging property photos to analyze the style and condition of rentals that perform well.

The tool will allow users to:

• Pinpoint areas with the fastest rental turnovers.
• Understand what types of properties (size, price range, features) rent the quickest.
• Gain deeper insights into property presentation and amenities that correlate with high demand.

Thank you in advance for your feedback. I’m excited about the potential of this project and hope it can bring value to the real estate investment community.

Looking forward to hearing from you!

Schuyler G. · Answer

Thank you for sharing that. Are you using a 20-35% down payment when evaluating point 3?

Greg Scott · Answer

I rarely invest where I would want to live.  My core investing philosophy is pretty simple, and has done very well across almost two decades and numerous cities:

1) Invest in cities with population (and job) growth

2) Invest in parts of the city where household income is near the median (or slightly below)

3) Invest in properties that provide cash flow from day 1

Schuyler G. · Answer

Thanks for the insight, Greg—I appreciate it.

What are the top three things you look for when deciding where to buy in a local market? I’m looking for a multi-family property or small apartment complex as a long-term investment. I’ve always felt that if I find a property in an area where "I’d want to live," is usually a good sign, but I’m curious how you go about underwriting a deal.

I’m in Phoenix, and I’ve been looking at the surrounding cities too. For example, Pinal County has the highest projected population growth over the next 30 years, but I’m not sure if that necessarily makes it a better market than Phoenix for long-term investments.

When evaluating a location, what are the most important things you focus on? Rental competition seems like a big one, but I’d love to hear how you weigh other factors too.

Thanks again for sharing your experience—it’s really helpful!

Greg Scott · Answer

We manage three large apartment complexes in two different submarkets in Indianapolis.  We have a large sample size. In our experience, things move in ebbs and flows and the speed of rental depends on your asking rents relative to competition.

For example, there was a period of several months at one of our properties when a 3 or 4 BR unit came on the market it rented almost instantly.  The 1 and 2 BR units at the same property were not experiencing this.  The 3 and 4 BR units on the other side of town were not experiencing this.  While competition hadn't changed dramatically, we noticed some of the competition had pushed up rents on other 3 and 4 BRs in the area.  We started raising the rents on the 3 and 4 BR units until the rate of leasing slowed to a normal pace.

Fast forward two years and we found ourselves with higher vacancy on those same units.  We hadn't changed the rents in a while, but they weren't moving.  This time competition hadn't really changed, but it didn't make sense for us to sit with vacant units.  We took the reverse action and started lowering asking rents until they moved.

I suspect the reason that one property of yours turned quickly is because your asking rent was very favorable vs. local competition.  If you had priced it 50% higher, it would probably be sitting vacant several months later.

We have a property near several low-income apartments.  Those apartments are usually at 100% occupancy due to the low rents.  They have a wait list.  When a unit comes up, it is already spoken for.  They have almost zero vacancy.  The "fast turn" metric would suggest that is a hot property.  However, if you bought it and managed it as a market rate apartment, your experience would be very different.

My point is, I can control how fast a unit turns simply by adjusting my asking rents.  What I do not control is the natural level of rents in any given market at any given time.  I pay close attention to market pricing.

Schuyler G. · Answer

Thanks for sharing your thoughts Greg. I completely understand your point about pricing adjustments driving faster leases, but my experience has shown that other factors play a significant role in a rental's performance over time.

For example, I own three rentals with very different dynamics:

1. One of my rentals always rents quickly, consistently performing well in terms of tenant demand.

2. Another rental is in a great area but has struggled recently due to increased competition from newly built apartment complexes. The rent dropped from $2,750 last year to $2,450 this year, and it took two months to lease. There were a couple of variables at play like time of year and agent showing the property..

3. The third property is more niche—a premium rental with a large RV garage. This one requires a very specific tenant who values that feature.

This variation got me thinking: How can I identify more properties like my first one? Rentals that are market-rate but lease quickly often reflect strong and steady demand. By analyzing metrics like average days on market over several years, I believe it’s possible to pinpoint investment opportunities in areas where specific property types (e.g., 2bd/2ba single-family homes) consistently perform well.

Building on this, you can also analyze current rental rates relative to nearby "for sale" comps to estimate ROI. The idea is to find a pocket or neighborhood that offers the right combination of estimated ROI and rental demand, giving a balance of cash flow and tenant demand.

In my view, this approach provides a more reliable signal of demand than relying solely on pricing adjustments or short-term market trends. It’s about uncovering high-demand niches that hold up even during fluctuations in the broader market.

What I’m describing aligns partly with absorption, but I’m looking for a tool that allows me to drill down into the components of that absorption rate—filtering by factors such as the number of bedrooms, bathrooms, home type, amenities, and more.

Do you see merit in this approach? Are there additional factors you think are worth considering? What tools are you using to evaluate markets?

Thanks for your reply and merry Christmas!