Market Analysis Criteria for Investing

[Abigail Hansen]

Hey BP,

I've seen/heard countless times that market analysis is oftentimes more important than property analysis. What are investors specifically looking for when they are conducting market analysis? Are there certain criteria to follow?  

Thank you!

[Bonnie Low]

There are quite a few threads on here about market analysis and some have links to specific reports and tools. I like to use Citydata when learning about an area's demographics. It all depends on what you're looking to invest in, but generally you're going to want to look at things like population growth, diversity of employers, median family income, average housing prices and rents. I like to understand who the major employers are and I look specifically for health care, tech, government, military and Universities. There are many, many statistics and you can quickly get into analysis paralysis so pick a few and focus on those that are meaningful to you when you're trying to narrow it down. And I highly recommend you spend some time there once you do narrow it down. There's no substitution for your own visual evaluation. Looking at the metrics won't tell you where the vacant and boarded up buildings are, the check cashing stores or the blight. But Google Earth can help with this. I also keep a local map with neighborhoods I do and don't want to invest in highlighted so when I see a listing I know right away if it's something I want to investigate further. I call the local Chamber of Commerce and ask for their free guides which will tell you what's going on in the area and you can usually pick up good referrals and get an idea what future plans are in the works from the Chamber, too. Good luck to you!