Accountant · Miami, FL · Member since 2020 · 89 posts · 57 votes
Hello,
So recently, I started learning about creating a target market for your business.
As I was learning, I got curious and asked myself "What would be the target market for a real estate investor who's business is renting out single-family homes?"
It would be incorrect to say that anyone can rent out a home. It needs to be more specific.
Can you share with me your target market: the people most likely to rent out an SFR? Please be specific by including demographics and psychographics.
I invest in areas around where I live, usually B areas. I know the area very well and is a great area for flips and rentals. Before I started, I didn’t look at the typical key indicators people discuss; job growth, rising population, etc. They are just solid areas and are in the Chicagoland market, but not Chicago. Those indicators are not really applicable to your typical suburban area. Who knows the market best, but in your own backyard.
If your investing out of state in a large city then i can understand the need for the research. To be honest, finding a local who understands the particular market is way more beneficial then any statistics.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y
Cash flow. Demographics and Psychographics are distractions. They don't guarantee you anything since the higher percentages for anything do not consistently tell the same story for every market.
I invest in areas around where I live, usually B areas. I know the area very well and is a great area for flips and rentals. Before I started, I didn’t look at the typical key indicators people discuss; job growth, rising population, etc. They are just solid areas and are in the Chicagoland market, but not Chicago. Those indicators are not really applicable to your typical suburban area. Who knows the market best, but in your own backyard.
If your investing out of state in a large city then i can understand the need for the research. To be honest, finding a local who understands the particular market is way more beneficial then any statistics.
Who are the type of people that come to you to rent and live in your properties?
For example, are these renters people that are parents with kids? Are they students going to college? Or does this not matter?
Yes. All those people rent...and not, it doesn't really matter. Each one of the example tenants (and more) rent in specific markets. All markets are not the same.
Here are your options:
1 - Choose a tenant type and find the markets they like to rent in 2 - Choose a market and find the tenants that like to rent there to fill them with, ...or...
SFH 3 bedroom units are generally families. They tend to stay long term because once school starts they don't want to switch schools. Most of my SFR have been there 5 years or longer.