What is it to "know your market?"

[Patrick Allen]

Hey all,

This question has been asked in many forms and answered a hundred times. Feel free to link me if another discussion is similar enough to my question.

Newbie investor; I have my first property under contract and am in the middle of due diligence (I'll post the finals when it's all through). I'm super fired up about it and am undertaking the task of "understanding my market;" which is Tucson, AZ, by the way.

To me, understanding my market means knowing what a 3/2 rents for compared to a 2/1, what a house in West University rents for compared to a house on the south side, what a 4 plex costs per door compared to a duplex, and the like. 

My attempt to answer this question is to self-analyze 400 properties over the next 6-12 months: 200 SFHs, 100 MFHs and 100 MHs. I hope getting data for what is "normal," "high," etc for where I intend to invest, so I can compare any deal to those numbers.

My question is what should I be looking for? What defines a market? What metrics should I start keeping track of?

A few I've come up with:

Price per square ft

Price per bedroom (SFH) or per door (MFH)

Cap Rate (particularly for small MFHs, which I hope to make my next "major" purchase)

Cash on Cash return

Debt Coverage Ratio

You get the idea...

Are the most important metrics universal? Does it depend on the market? Or is it something else: like segmenting each neighborhood and comparing numbers only to one another? 

If the latter-most, how best to organize it?

Then again: as an investor I don't care so much about property location, size or age, so long as

1) I can put a good tenant in there that will stay for a long time, and

2) it provides a strong CoC ROI with all the numbers considered.

Thanks in advance everyone! I promise I'll start posting more now that I've finally made the leap ;-)