Submarket Research Process Help
Rookie investor here; what set data points do you try to find when you're researching a submarket? I want to develop a process, but don't want to waste time with gathering research points that are ineffective. Below is the questionnaire I've come up with, although please feel free to critique it! (note: for trends/growth I'm looking post COVID due to it's impact)
1) What percentage of submarket (SM) rents vs Dallas avg?
2) Rental population trends - is % of renters growing over time?
3) SM Property Value Appreciation Trends
4) SM Pop Growth
5) Safety compared to the rest of Dallas
6) Income - median and avg
7) Rent Cost - median and avg
8) Rent Growth Trends
9) What percentage of population under poverty line
10) What percentage of pop are families
11) What percentage of population are families w kids
12) Avg people in a household
12) historical vacancy rate
13) avg bed/bathroom composition
14) Profession by percentage
15) Commuter population by percentage and commute time
Thanks y'all!
Too much analysis. Find deals anywhere in the metroplex which you can afford, then find reasons to exclude them from consideration. Along the way you'll develop favored and disfavored submarkets. A good deal can happen anywhere.
I have some experience on the institutional side. Analysis like this was the norm for Build to Rent projects and for comparing MSAs. Portfolio construction and forecasting are different things than buying a few rentals.
Focus on the individual deal. What is your first year yield on cost? Second year?
I love when new investors ask about safety in an area that has a lot of development. Safety and real estate finance / appraisal / underwriting don't really go along.
Ok great, thanks y’all, I really appreciate you taking the time to reply and give guidance on learning submarkets through deal analysis. Have you found any of the above items end up not playing a role when looking at specific deals? Thanks for helping me leverage my time doing research!