QOTW: What data do you consider important when looking to invest?

Jocelyn KaufmanBusiness Member

Realtor · UT · Member since 2022 · 63 posts · 42 votes

4y

Demand for rentals in the area. How many tenants are you getting to choose from and will the unit be easy to fill once it is vacant in the future.

Joe Miller

Real Estate Broker · Columbus, OH · Member since 2021 · 203 posts · 247 votes

4y

Growth and what the economic drivers are in that specific area!

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Austin McClainBusiness Member

Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes

4y

Population and growth and if large companies are headquartered or moving to the area. They tend to bring a lot of development and stable jobs.

Erica Ricketts

Member since 2021 · 18 posts · 13 votes

4y

Historical and predicted appreciation in that market, unemployment rate and economic growth in the market, how landlord friendly the state/county is, how many STR are in the area and the median ROR on them

Loren Clive

Residential Real Estate Broker · Paia, HI · Member since 2016 · 479 posts · 311 votes

4y

Location. View. Uniqueness of property. For example, here on Maui 3br vacation rentals are pretty rare, so I'd be willing to pay more for that. Upside, i.e. ability to add value either through remodelling, adding bedrooms or additional dwelling, and/or self-managing to improve returns, etc.

I only invest on Maui, a market I know well. Not too concerned about population growth and/or employment since we have low unemployment and more people who want to come here than housing available.

One thing I've learned working with buyers is the vastly different definitions of a good deal. Some people just want a tax shelter that they can vacation in and break even. Others have a specific ROI with unique formula as to that calculation. So interesting what people want!

Kyle Kovats

Rental Property Investor · Hoboken, NJ · Member since 2014 · 65 posts · 64 votes

4y

From a micro perspective, a couple things that are not necessarily considered, "data" but have always been a good rule of thumb I've invested by is "walkability" which largely is location.

My properties that I have invested in that are within walking distance of a supermarket seem to always be winners. I don't think we as investors always recognize the fact that we are privileged to have 2 cars in a family. A lot of our tenants only have one. So when that one car is out and they're low on food or medication, being able to walk to a supermarket or pharmacy is huge. If on top of this there are other destination points within walking distance such as starbucks, restaurants, bars, chains in particular that is usually a great sign. Certain franchises do a lot of research before approving locations (CFA and Starbucks come to mind).

From a macro perspective, population growth, economic growth, wage growth, diversity of employment sectors, landlord/business friendly states.

James Wenzel

Investor · TX · Member since 2020 · 57 posts · 60 votes

4y

Location, growing population, growing job market, landlord friendly laws, submarket analytics (as a baseline), are the deal analytics conservative, moderate, or aggressive, CAP rate manipulation for CRE deals. I also like deals that are already cash flowing. I typically put 80% of capital into cash flowing assets and the other 20% of capital in other things like developments etc... Most of the deals I invest in passively double my money in 3-5yrs.

3 Reply

Daniel Wirth

Member since 2018 · 11 posts · 15 votes

4y

In the Market I am in, tourism, building codes for ADU's and STR laws. Average apreciation (historically), age of buildings and location. Many areas are of higher value than others, but all are higher than lower income cities.

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Dave Van HornPro Member

Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes

4y

Depends on the asset class of course but in addition to much of the above I'd also add eviction timelines for the area which varies by county, average days on market for rentals and sales (tells you if its a buyers or sellers market), median income of the area (i.e. how many people can afford the rent in this location), the ratio of rental properties vs. owner occupied, and new construction starts (this can definitely be a leading indicator for a growing or declining area - 6 months either way can probably tell you this).

Erin ChurchPro Member

Real Estate Agent · North Augusta, SC · Member since 2017 · 254 posts · 233 votes

4y

@Dave Van Horn Yes! I invest in buy and holds, and it's super important to know if an area is landlord friendly!

I look for:

- Landlord favoring laws

- Growing businesses (strong job market)

- Decent schools

- Housing prices (I won't be buying in Cali even if it was landlord friendly)

- Cash flow (so, that will take into account taxes and insurance for the area also)

4 Reply

Karoline KaonPro Member

Investor · Queens, NY · Member since 2016 · 63 posts · 22 votes

4y

Many of the posters provided a lot of valuable information! I want to put out there another perspective regarding strategy.

Something that I consider when looking at different markets, is what is my strategy. Before deciding on an area, I need to know what type of property am I looking for? Is it a vacation rental, an STR, Long-term rental, or apartment complex. In certain markets, there are deals that might work for example doing a STR in NYC might be more viable than a long-term rental.

Kar Sun

Member since 2021 · 388 posts · 277 votes

4y

Location, population growth and desirability, landlord friendly states, local, quality of construction, no repairs. I buy A class only.

Mike Gonzalez

Real Estate Agent · Ormond Beach, FL · Member since 2020 · 20 posts · 22 votes

4y

** NEWBIE Question - when everyone talks about population growth, job growth, desirability, landlord friendly...do you have a go-to-site that is trustworthy? I can google and hundreds of links will come up, but how do you know which site to trust? For example, I know Jacksonville, Orlando, and Tampa are all growing after reading on zillow and realtor articles. Is this enough data to gather to move forward? Are there other sites? Thank you!

9 Reply

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

4y

Location, location, location!

Yes, I want a property that cash flows, is attractive, easy to maintain, etc. But the most important of all factors is the location. I want it in an investor-friendly (aka: just) state, a growing city, and a nice neighborhood with solid schools.

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Michael Haynes

Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes

4y

Looks like all the Pros want the Macro Economic Data. I go to Zillow and do a Search...Lots for sale. I need to know the land value in that area. Then, the current Cost of similar, New Block or Stick Construction. Add the two together on the particular property you have and start deducting all the fixup costs etc. age of the house and street appeal. Go to Google Map and do a fly over of the property online, including Street View and see what the neighborhood looks like before driving over at a time when the neighbors are home to check things out. Would I live in that house for two years to make it a Tax-free Sale of my Residence if I had to? Add up your numbers and see if it will Cash Flow.

3 Reply

Raymond Reyes

Real Estate Agent · Orlando, FL · Member since 2015 · 55 posts · 22 votes

4y

Definitely looking for good cash flow, but some other criteria I look for are... making sure the state/city has landlord-friendly laws, population growth, and a strong/growing job market.

To your point @Karoline Kaon some areas are better suited for different strategies such as STR where other factors would apply.

Cole Simpson

Rental Property Investor · Columbia, SC · Member since 2020 · 302 posts · 186 votes

4y

I mostly look at cash on cash, vacancy rate, and population growth. Then make sure insurance and taxes won't destroy a deal

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Alicia MarksPro Member

OP

Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes

4y

Quote from @Cole Simpson:

I mostly look at cash on cash, vacancy rate, and population growth. Then make sure insurance and taxes won't destroy a deal

I would second this. I have investments in Detroit where we pay a city and county tax. If you only go to the city to get the answers, you don't know that the county taxes exist at all. This is where a knowledgeable realtor or a forum like this is so valuable. Other local investors have helped members here analyze a deal and it's almost always a factor that is missed on due diligence.

0 Reply

Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

4y

1) Rent-to-Price Ratio by property Class

2) Days On Market for sales and rentals within those Classes

3) Rental amount trends within those Classes

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Kar Sun

Member since 2021 · 388 posts · 277 votes

4y

Quote from @Mike Gonzalez:

** NEWBIE Question - when everyone talks about population growth, job growth, desirability, landlord friendly...do you have a go-to-site that is trustworthy? I can google and hundreds of links will come up, but how do you know which site to trust? For example, I know Jacksonville, Orlando, and Tampa are all growing after reading on zillow and realtor articles. Is this enough data to gather to move forward? Are there other sites? Thank you!

I do not look at sites and only purchase local. And preferably in close proximity. I am fully vested in my community and only rent to high quality tenants.