All Forum Posts by: Brian Larson

@Brian Larson - Are you asking how to assess rental demand in any given market? A good indicator of this would be analyzing the HUD Fair Market Rents year over year. These are the rates established by the government that support housing assistance vouchers. You can look it up here: https://www.huduser.gov/portal/datasets/fmr.html

More or less, if you see the HUD Fair Market Rents increase year over year in a given area, that is indicative of rental demand. For instance, in my market, from FY 24 to FY25, the HUD rents increased by 11% (Worcester MA) signifying significant increases in demand vs. other areas where it may stay stagnant or lower which would signify the opposite. Hope this helps!

@Brian Larson Kudos to you for thinking outside of the box and problem solving a housing need. Most investors take a look at the available rental units in a particular market,  determine if its a good or bad market based on DOM and either dismiss the market all together or replicate the housing units that are absorbed. There is usually a missed opportunity in most markets delivering housing products that are needed but not readily available and the Zillow data most rely upon does not tell this story.

Get to know the members of a community, their needs, what steers them away from the housing that's currently available. If you are the lone supplier of a specific housing product and there's pent up demand you will absorb your units quicker and have tenant stay longer given the lack of alternatives. If there are barriers that limit similar supply and you figure out how to get the housing units online, even better. 

A few years ago I got caught with a number of housing units I built in Philadelphia I planned to sell to owner occupants if not for the  2022 unexpected rate increases. At the time there were limited 3 BR rentals in the neighborhood, but achieved such high rental rates the properties ended up performing better as rentals than as a for sale project. There was no market data indicating there was a market for $3K 3 BR rentals but that was merely because nobody ever supplied the market with the inventory. As a result there were tenants who settled for 2 BR units and were dissatisfied or alternatively sought rentals in different neighborhoods.   It was those 2022 delivered  projects where I became an accidental landlord that led me to focus more attention on building to researched housing needs rather than simply replicating the inventory other's bring to the market and it's been a game changer for me and my business.