Medium Multi-Family Market Analysis Methodology
A Happy New Year to the BiggerPockets Community!
While I wait with baited breath for Brian Burke's annual market analysis for the coming year...
(His 2016 analysis: Best markets to buy multifamily in 2016: A round-table discussion)
...I thought I'd ask around the community to see if I can figure out how to do this myself with a slightly different focus.
I understand the generalities of how this study was done, and most of the major factors (population growth, job growth, etc.) but I'm less interested in properties in the 100+ unit range and Tier 1 markets. My focus right now is in properties I can self-manage (or mostly self-manage) and get into without having to raise capital, syndicate, or otherwise make myself hugely accountable to outside investors that I have no existing relationship with. (I would never feel comfortable with investing someone else's money in a way I hadn't done before on my own with great success.) So, in my mind, I'm looking at ~30 unit properties in Secondary and Tertiary Markets in the Northeast that have solid economic outlooks for the next 10 years.
My home market of Rochester is currently bogged down with taxes and in one of the least business friendly states in the country, and is projected to lose population and businesses in the next 10 years. Yet there are also a lot of people coming here from out of area because it's cheap and cash-flows. I'm going to keep investing here because I live here and I know the market, but I don't see any real growth, which means we won't see any real appreciation (which is the historic norm for the area.) So in the short term, the cashflow is good, and as long as I'm buying value-add properties I don't have to worry too much about appreciation - but if I can do those two things in a market and get some appreciation on top of it....why wouldn't I want to do that instead?
What I'm really interested in is learning how to find and select these types of markets for myself, or at least figure out a way to start narrowing them down. What factors are most important? How are they weighed? Where can I find reliable information on population change and economic outlook?
So if you just want to say "Indianapolis is awesome" that's great, and I appreciate your input, but I'm still going to figure out for myself if I think you're right or not.
Thanks All!