Hi, Newb here, trying to understand things. How do you research a new market/suburb/neighborhood? I understand that in general I should be looking for trends in employment, what sector is driving the market, where the good schools are, where population is growing or shrinking, how a neighborhood is trending, crime rates, etc. But I need a process. What criteria do you make sure you've checked, and what websites do you use to check for each criteria? I understand that a RE agent or a property manager would be the best way to get this info, but I'd also like to learn to look things up myself. I'd appreciate any insight you have. Thanks in advance.
Market Analysis is one of the three most important "Pillars of knowledge" for all REI. I don't analyze properties...I analyze Markets. My goal here, is to find the micro-markets. Most don't understand how to do it, because they focus on buying/selling/renting evaluation based on what a REA would look at.
I don't care about school systems, up and coming areas, growing/shrinking populations, etc... Why, because these "factors" alone mean nothing to the investor. They mean a lot to the homeowner/renter though. I know, that sounds contradictory, but it really isn't.
Why, because the numbers ($$$$) for all three (buying/selling/renting) will tell me in detail just how much all of those "factors" mean to them. Who are we to read a school system's rating, and know for sure how much that matters to those buying/renting there? The answer to the "how much", is found in the numbers ($$$$).
I analyze the numbers:
Listing Prices = Cost to enter the market
Sold Comps = Cost to exit the Market...with the difference (including added costs like rehab, etc...) being my potential profit.
Rental Comps = Cash flow potential (when you include the Listing Prices, taxes, insur., ...)
When I say I don't analyze properties that is a little misleading. I actually do analyze properties, just not one at a time. When I analyze markets, I'm actually analyzing every property in that market at the same time.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you