What is a good way to determine your investment market? I know that most of baby boomers are going down south like, Arizona, Georgia, South and North Carolina, Texas, Florida, Oklahoma,etc and those becoming a renters markets. But how do you choose or determine which market is a good one to start investing as there are great deals available in all those markets.
@Martynas Fedotovas Hello again.
Go to the link and go to part 1 &2. It will walk you through how to pick your market.
If you just get started, just do own and neighboring states. Enough to get you busy.
As an agent, I look at the MLS and study the ratio of sold properties to available properties in 100k increments. 100k-200k 200k-300k etc. It usually will give you a pattern to follow where everyone is moving and what the market is doing.
@Christopher Hunter thanks a lot!
@Ethan Smith make sense! Thanks!
@Kadeem Wells thanks much! Appreciate!
Some good sources for research will be with the national commercial real estate brokerage firms like Marcus & Millichap, they have excellent overall information regarding RE related economic data. Once you get a fill of specific areas then local business journals normally published on a monthly/weekly basis & the business sections of daily local newspapers can provide more current information.
We like to look for areas with comparatively high cash on cash return with good population growth in the last five years and good projections for the next 5 years. From there you can narrow it down to a few cities and research the local economy and major sources of employment. There are some lesser known satellite cities across the country that have solid economies worth investing in.
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@Martynas Fedotovas I'd invest in areas where the numbers make sense. Looks like you've already identified those markets. From there I'd try to connect with experts in the market. If those experts are teams/agents I'd ask if you could connect with a couple of their clients/vendors that are experts on the market as well to get a few opinions. I'd also look at reviews of those vendors.. if people are very happy with the investments they made and the providers even after they've closed, that's a pretty good sign you're on the right track!
Keep in mind that other than baby boomer/retirement areas, other great indicators of attractive markets include:
- A strong workforce with several employers
- Average Salary of at least $40,000 (to be able to afford $1,000 / month rents)
- Positive Population growth
- Increase in jobs
- Tertiary Markets
- Existing Barriers to entry (difficult to build)
- Landlord friendly states (easy to evict)
@David Danforth gave a great resource to find market studies. Another cool tool is https://www.weareapartments.org
@David Danforth thank you!
@Nick Earls super good! Thank you much!
@Alyssa Dyer great advice! Thank you much Alyssa!
@Andrew Hogan thanks! That was fantastic!
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