Best Strategies for Starting to Research a Rental Area
New to Real Estate · New Haven, CT / Washington D.C. · Member since 2020 · 8 posts · 4 votes
Hello fellow investors:
I am just getting started and trying to soak in as much as possible as I navigate finding my first deal. I wanted to ask about how folks here approach doing research on a rental area to determine if it's a good place to be and how granular do you usually get?
The issue I'm running into is that I'm thinking of investing in my hometown area - where I no longer live but still have family - and I believe more emotional perceptions may be dictating whether I think I want to invest in one area over another. It would still be useful to know what resources people usually consult to learn more about an area - especially a relatively low profile place that may not be a DC/LA/NYC etc.
Thanks so much in advance!
Hi Eric!
If you're trying to avoid the emotional component if REI and not necessarily looking to invest where you've got family, it's most often a numbers game and researching markets. There are a few 'tried and true' investor favored markets that tend to fall on out of state investing lists for reasons that are mostly all numbered based.
This means; not based on trends and reactive markets (TX, Vegas, etc. at the moment for example) and those that fall into historical predictability - as 'predictable' as REI is anyway.
This is going to range on what you yourself feel personally comfortable with in terms of your numbers/financial goals and what key things you decide are important. Industry (projected job and therefore population growth) for example is one thing some investors look at beyond the basic points of;
1. Average purchase price point
2. Average rehab cost per Sq Ft
3. Average monthly rental yields for buy and hold (% based as it pertains to relative mortgage payment/holding costs)
4. End user 'pool'- the why for Flippers at the end of the day
5. Landlord or Tenant Friendly State legislation
6. Tax rates
7. High occupancy/low vacancy rates
8. Unemployment rate
You're correct that 'low profile' by comparison to other markets is easier to begin in, if nothing else than purchase price point alone. I'm more than happy to tell you about Indianapolis and what the Hoosier State has to offer for some investors.
I would say that many folks try to connect with other investors by means of platforms such as Bigger Pockets yes, also getting involved with a few REIA (right now is a great time for online meetings and the ability to be a part of REIAs all over) and connect with some agents just to chat in the markets that you're looking into- I can help you there if you'd like for Indy and other areas.
There are going to be various podcasts, articles, blogs, etc on markets and what's trending, but I would personally suggest using numbers as my point of guidance and not follow trends as much as historical/long term results.
Hope that helps at least answer questions about how some people evaluate markets and who to talk to = )
https://www.rentometer.com/ - in the meantime keep that link handy for quick rent checking
https://www.propstream.com/- this one can be helpful when used in conjunction with Zillow, Realtor.com, etc.
https://www.fortunebuilders.co...- quick reference of landlord friendly states
Hi Eric!
If you're trying to avoid the emotional component if REI and not necessarily looking to invest where you've got family, it's most often a numbers game and researching markets. There are a few 'tried and true' investor favored markets that tend to fall on out of state investing lists for reasons that are mostly all numbered based.
This means; not based on trends and reactive markets (TX, Vegas, etc. at the moment for example) and those that fall into historical predictability - as 'predictable' as REI is anyway.
This is going to range on what you yourself feel personally comfortable with in terms of your numbers/financial goals and what key things you decide are important. Industry (projected job and therefore population growth) for example is one thing some investors look at beyond the basic points of;
1. Average purchase price point
2. Average rehab cost per Sq Ft
3. Average monthly rental yields for buy and hold (% based as it pertains to relative mortgage payment/holding costs)
4. End user 'pool'- the why for Flippers at the end of the day
5. Landlord or Tenant Friendly State legislation
6. Tax rates
7. High occupancy/low vacancy rates
8. Unemployment rate
You're correct that 'low profile' by comparison to other markets is easier to begin in, if nothing else than purchase price point alone. I'm more than happy to tell you about Indianapolis and what the Hoosier State has to offer for some investors.
I would say that many folks try to connect with other investors by means of platforms such as Bigger Pockets yes, also getting involved with a few REIA (right now is a great time for online meetings and the ability to be a part of REIAs all over) and connect with some agents just to chat in the markets that you're looking into- I can help you there if you'd like for Indy and other areas.
There are going to be various podcasts, articles, blogs, etc on markets and what's trending, but I would personally suggest using numbers as my point of guidance and not follow trends as much as historical/long term results.
Hope that helps at least answer questions about how some people evaluate markets and who to talk to = )
https://www.rentometer.com/ - in the meantime keep that link handy for quick rent checking
https://www.propstream.com/- this one can be helpful when used in conjunction with Zillow, Realtor.com, etc.
https://www.fortunebuilders.co...- quick reference of landlord friendly states
Hello fellow investors:
I am just getting started and trying to soak in as much as possible as I navigate finding my first deal. I wanted to ask about how folks here approach doing research on a rental area to determine if it's a good place to be and how granular do you usually get?
The issue I'm running into is that I'm thinking of investing in my hometown area - where I no longer live but still have family - and I believe more emotional perceptions may be dictating whether I think I want to invest in one area over another. It would still be useful to know what resources people usually consult to learn more about an area - especially a relatively low profile place that may not be a DC/LA/NYC etc.
Thanks so much in advance!
Where is your hometown area? That might make sense if you have connections there and can find contractors / realtors / property mgmt team, etc.
@Eric Salgado I help investors make sound investments backed up tech and data, what area are you looking at? I would love to help answer any questions you may have and take the emotional aspect out of it.
@Anna Laud - WOW, thank you for all of your insights and taking the time to share all of that information. I appreciate it. I am really toggling between whether to get into the multi-family game in the New Haven, CT area or in my "home base" city of Washington, DC. I live and work overseas (rent free) so it's like my career is built to allow people to leverage real estate investing for wealth building purposes. I have not thought about anything outside of those two areas (to start) and think I probably wouldn't feel comfortable until I get my first couple of deals done. Right now I'm just incredibly motivated to get this first purchase down.
In any case, I will reference the resources you provided and I hope you won't mind if I stay in touch with questions!
@Eric Salgado
You bet!
Totally understandable about sticking to areas that you know and are more familiar with and yes please reach out with any questions you have and I’ll do my best to help answer them. I have had family in a very similar job position to you and I’ve been through this with them before as far as investing from overseas, so I know what you mean.
But yes, always happy to help so reach out whenever = )