What Are Your Most Important Market Analysis Metrics?

Question

John Acklen · Answer

I'm trying to educate myself on this as well, @Josh Oaten.  Some of the research I'm including in my market analysis is:

1) Rent-to-Income Ratio

2) Unemployment Rates

3) Population Growth

4) Future employment/development trends in the area (i.e. what are the major employers? Do you think they will be in business for a long time?)

5) Crime statistics

6) Median Income

7) Percentage of Renters vs Owners

Are there any other key metrics that BP is looking at when identifying markets to invest in?

Thanks,

John Acklen

Hadar Orkibi · Answer

To add:

Job growth.

median house price, over $120k

Can i build a team on the ground there?

Michael Dang · Answer

- Annual Rent increase\decrease for the market.  This will help determine any upside.

- Number of new multifamily developments coming to market in next 2-4 years.  This will help determine demand and where the growth is

- Traffic counts

- Tenant\Landlord laws.  Is it favorable to the Landlord or Tenant?

- If pursuing Fannie Mae or Freddie Mac agency debt determine if it is an approved market or not

Nathan Platter · Answer

Hey @Josh Oaten ,

ROE (Return on Equity)

It's the 1 - (total return / amount invested)

John Fortes · Answer

Ton's of different things but we like to go into a market knowing this:

market rate

establishing a team on the ground

job growth (what companies are coming in and out of the market)

landlord friendly state laws

crime

population

There are a few more as well. But everyone here is listing the most important ones. There are a couple of ones that may check off the box for us more than others. Hope this helps.

Russell Brazil · Answer

Rent Growth

Phil Christian · Answer

1. Class A lease rates in sub-market.

2. Institutional Class A/B leases rates in sub-market.

3. Resident Demographics.

We buy Class C assets and value-add to a B with rents drafting off institutional rents.

Brandon Ingegneri · Answer

My gut and knowledge of my market.  Metrics help, but its not the end all be all.  I've seen some very smart people over think deals and miss out big where I was there ready to pull the trigger.

What Are Your Most Important Market Analysis Metrics?

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