How and where do you start to gather information on a particular market?

Question

I'm 22 years old and still in college, but I'm looking to start investing asap.  I want to invest in a rental property around my school.

What are the first things I should start looking into about the area? I know that Google is going to move a branch to my city in a few years, and that they are going to build a mall, and the government just pumped some major money into the area this year, so I expect their to be "some" appreciation.

Also do you have a good idea of what houses are worth while you are looking? or do you find a house, ask the price, then compare?  Just trying to get a grasp on the entire process, and the order it usually occurs in.

Thank you!

Account Closed · Answer

I use the MLS, title company reps and I drive my neighborhoods.  The MLS is a great way to get neighborhood data of all sorts.  Not much beats driving the neighborhoods though.  I often check out homes that were listed in the MLS to get a better sense of the data I collected.

If I see open houses I always stop to take a look.  These are a great opportunity to look at improvements and see the inside before a property sells.

Kevin Kaczmarek · Answer

Zak, knowledge is power. I would set out to become a subject matter expert in the market you are looking to make a jump into. Set a target date for you to get your first deal started, so you avoid analysis paralysis. I moved to a brand new market myself two years ago and for me to learn my market there was no substitute for talking to local market investors, business owners, non-real estate people, and the internet, along with some trial and error. In the end you walk away knowing more about the market than some locals who have lived their whole lives there, because you are asking the right questions.

Shea Stringert · Answer

Hey Zak,

I'm in a similar situation as you.  I've found using craigslist and sites like hotpads.com extremely helpful for getting a sense of rent prices and what goes for what.

As for knowledge on the properties of the areas I called 4 or 5 brokers who work mainly with investors for the type of properties I'm looking for.  This was very useful for me.  As one of the other peope posted, nothing beats pounding the pavement and getting out there.  Go see some properties!  Before you do that though, get an idea of exactly the type of property you want.

Best of luck!

Karen Margrave · Answer

Zak Kazanski Welcome! OK, you've narrowed down the market you want to work to around your school. Next, become an expert on that market. Bill had some good ideas as to rental publications, papers, MLS, online, etc. Watch Zillow (be sure to click on active, sold, pending)  There's also realtor.com etc.

Go to any open houses in the area, and see exactly what the product is that they're offering, materials used in finishes, etc. so that you can compare apples to apples.

Once you get up to speed on that stuff, you will have a good foundation on which to build, and be able to easily make decisions when you see something come on the market, or to farm an area and try to find houses for sale that aren't listed.

Don't get to bogged down in local economic stuff... that can be overwhelming. Focus on what you need to know for what you are doing.

Luis A. · Answer

There is no substitute for just driving the area, walking the houses and talking to the people.

Yes, you still need to find out about the local economy, demographics, etc...but the best way I know of to really get to know a market is to drive around, call for rent signs, talk to agents, talk to tenants living in the area, talk to other landlords, talk to neighbors and so on.

You will see that when you start doing this and compiling information and putting together a list of what is renting or selling for what it will start to make sense to you. SO that you will get to the point where you will be able to tell what something can rent/sell for.

Rob Gillespie · Answer

Hi Zak,
I would begin by picking a neighborhood. If you are looking for appreciation, I would pick a middle class area. Somewhere that more people own than rent. Ghettos just don't go up in value, they are just for cash flow.
Next I would look at everything in that zip that is available on the MLS through a realtor that is in your price range. Make sure you look at market time. Anything that is sitting a long time is not the price ya wanna pay, LOL!
Ask the Agent to give you a list of homes in that zip that have sold in the past 12 months. Also look at the market time on each one of them. 
Finally, look at the transfers in the paper every week and stay on craigslist watching.
There is not a better way than just being in the market for a while. It will just get mush easier once ya are in the game for a while!

Good luck!

Bill Gulley · Answer

Welcome to BP Zak!

Start collecting Homes Magazines and the RE section of the newspapers. There should be a Rental magazine for ads as well. Prices won't always be given, but you should have unlimited minutes, so call and ask, that will save you gas money...lol

Look on the public side of your MLS lsitings and study the locations and price ranges.

I don't know how receptive the people will be at the local planning and zoning office, but you could go there and ask about growth plans for areas and city planning issues. They should at least have several maps that you can look at to see what areas could be impacted by new development.

Get with a Realtor and tell them your plans and pick their brain and look at some properties.

Find an REI club and attend the meetings, get to know those investors and maybe find a mentor.

Get to know those in the RE industry in your area, appraisers, closers, title company folks, fix it guys and construction types, and above all, an attorney you can call if needed. Find team members that you can make quick calls to as needed.

Being in school there you're probably up on where the college crowd goes and lives, that can be a great rental market if you can get a property that the most in that crowd would like, think about where you'd like to live. Good luck