How to learn your market.

[Jonathan W Dowling]

I keep hearing I need to know my Market. What does this mean? Is it knowing what housing and rental prices are. Should  I be going to city council meetings.......etc.???? 

[Ned Carey]

@Jonathan W Dowling I once heard the 100 house rule "Until you have looked at 100 houses you don't know your market"

What I tel people is go out and look at lots of deals. All kinds of deals, listed properties, FSBO, your own marketing, deal from wholesalers, open houses etc.

Many areas have pubic auctions. Not just courthouse step foreclosure auctions but on site actions where you can go inside, and inspect the house before the auction. This is a great way to learn. Walk though do your own evaluation then when it is over ask some other bidders what their thinking was. "What would it sell for when renovated?"  Or "what would it rent for?'  How much would the renovations cost, etc? 

Also any time you get the chance to visit another investor's deal do it and ask every question about the deal you can think of. 

Another Level.

There is another level of knowing your market or a potential market to invest in. That is what are the prospects for the growth in the economy. Number one is jobs. Are new jobs coming? Jobs mean population growth. Population growth means higher demand, higher demand means higher prices and rents in the future. 

This type of analysis comes from yes city council meetings, or talking to the chamber of commerce. Is the area pro growth and pro business? Are new companies coming to the area or are major employers set to leave? What is happening in terms of building permits? There are lots of areas to research for this kind of analysis.