What sources do you use to research your markets?

Question

I have recently decided I want to be an investor.

I have been reading books, listening to podcasts, and reading articles here and there.

But I want to be able to research my local markets and know what I am looking for.

Can anyone help with what sources they use for researching their markets and what are some of the factors your really like to keen in on?

Thank you in advance!

Tamara Deering · Answer

@Dylan Viola

Those indicators are predictors of market growth and they are used for speculation, they will help you determine the likelihood that an area will increase in value over time.  They are not the indicators that you would use to evaluate whether an investment is a good or a bad buy.

Government reports and indexes will provide the information you have asked for.  Zillow and Realtor.com have neighborhood demographic reports.  You can google any of the information that you are looking for and the information will appear. Investors use all sorts of crystal balls to determine whether an area is appreciating or depreciating, one of my favorites is the Starbucks or Trader Joes indicator.  The theory is that these are retailers who spend a ton of money identifying where future growth will support their sales targets so if you invest where they are going to build then there is a good chance for property appreciation.

As for what investors look for to decide if a project is a good buy vs. a bad buy it is all done by comparing an individual opportunity to past performance and expected performance of an asset.  In the single family and small multi-family rental space this is done by determining how much cash flow a property is going to produce and how that compares to other properties in the same market.  In the larger multifamily and commercial rental space the key indicators are NOI, Cash on Cash Returns, Cap Rate, etc.

For flips and BRRRR's the key indicators that investors look for are what comparable properties have sold for in the past 90 days or so less than 1/2 mile from the property they are looking for the likely potential profit of a property in the next 30 to 60 days not long term growth predictions.

Dylan Viola · Answer

@Tamara Deering

I didn’t mean listed houses and prices.

I meant like the more in-depth numbers

Like job outlooks, renter vs owner, typical rent prices for 1,2,3 bedrooms, population growth.

What are the sources to find this kind of information and what are the main points investors use in deciding a good vs a bad buy

Tamara Deering · Answer

@Dylan Viola

The usual suspects Zillow and Realtor.com will let you know what's for sale for what price in your area.  Once you decide what type of property you are looking for put it your criteria in one of those two portals and see what pops up.  Identify a neighborhood that has the highest number of properties that meet your criteria and go for a drive.  Check the neighborhood out at all times of the day and increasingly widen your search until you have a good sense of a market area to focus on.  Once you have that information in hand along with a solid understanding of your budget and your ability to be financed contact a good Realtor to help you refine your search and send you listings as they come on the market or the price changes.