The Importance of Analyzing Markets You Are Investing In

[Jason Malabute]

Certainly, it is crucial to know the market you are investing in; and one of the most important factors to analyze in a market is the population.

This being said, you should only be investing in a market where the population is rising steadily. Quite recently, I decided to step back from a market I was considering investing in. Reason being – a steady decrease in the population over the last 10 years.

Some other important factors to consider before stepping into a market are job growth, median rent, and median income. You would want the median income to be 3x of the median rent or the rent you want to charge. Any lower than that means a higher risk of not getting the rent on time! You should make sure the tenants can afford to rent from you.

Besides, the crime rate is also quite a crucial factor to consider. Trulia proves to be quite helpful in determining high crime areas in your city; so that you may avoid investing in such areas.

However, the internet has its limitation. Thus, you should always consider discussing ‘areas to avoid’ with property managers and other investors. They have frontline experience of the neighborhoods and can often guide you better than the internet does!

Lastly, you should always talk to the contractors to estimate rehab costs – especially when you are investing in a new market.

I believe that real estate is all about teamwork and cannot be managed and maintained singlehandedly. Hence, we should rather reach out to our team while making decisions or when we get stuck. We shouldn’t try to do it all by ourselves!