How do you analyze a real estate market

Question

Hi everybody,

I'm interested in how you analyze a real estate market. Specifically how you pick a market, what you specifically look for in that market, and red flags that you look for. Would love to see the different ways people analyze a market, and maybe myself or someone else will learn something.

Thank you in advance!!!

Garratt Brannock · Answer

@Michael Dumler Thank you Michael!!!

Michael Dumler · Answer

@Garratt Brannock I saw a similar post about this subject the other day. While one investment strategy may work in one market, that does not necessarily mean it will correlate in another. Others can attest to this, but I believe your investment strategy is dependent on your market and vice versa.

This may sound broad, but I study every factor/variable that may have an effect on my investment strategy and specific target market. I find it extremely important to know and track your numbers on a consistent basis. It's vital to learn housing metrics such as, average SFH sales price, average vacany rate, lease comparables for different properties/subdivisions. I also look into potential economic trends like, new job growth, relocation of companies, overall increase/decrease in employment. I try to dig into and seek governmental policies, for instance, laws that may regulate/cap rent, property tax increases, different zoning laws that may hurt or help my 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.