Market Choice - Market Analysis Resources/Data accumulation?

Question

I have a choice that had been a portion of what is keeping me from jumping into full investment.

I have since found a path forward and will be moving on this soon, however I am still interested in this topic.

When beginning, or choosing a new market, what resources are used by seasoned investors to determine suitability of a market?

Some useful resources I have come across thus far:

Cromford Report - Phoenix area (overall real estate market, specific for PHX area)

bls.gov (economic information in general)

http://www.city-data.com/ (more economic/general information)

www.trulia.com (crime, schools, etc.)

Are there paid sites/reports that can be found to compare overall markets bullet by bullet for a period of time and over time?

rent trends, population movement trends, population change trends, job change trends, pay trends, crime trends, etc.

All of interest to me...

I know it takes time and research to get this stuff done...but is there a resource out there that might make it easier (at a cost, or otherwise)?

Happy Friday!

Tim Winter · Answer

@Jason Mendoza If you're looking for rental property data, most often rentals follow two things. Job growth and availability of rentals. You mentioned the Cromford report and city-data.com which are good information for current or past data, but if you're trying to forecast into the future, you need to get involved with the data of where things are going to be developing in the future. That data you can get from where things are going to be built in the future. Where are permits being pulled, where are the areas of development happening, who has plans to move into which sectors of the city (i.e. large business moving into the area like Amazon, Apple, Walmart, Banner, banks, ASU (and all their affiliate campuses and satelitte campuses) Intel, USAirways, Dignity, Amex.. if you can follow where these large employers are bringing in jobs, then housing will follow.

If you join and attend the chamber of commerce or building planning meetings and organizations you can get a sneak peak into where the next areas of future growth will happen. PM me if you'd like some more info on how to get started.

Dovid Staples · Answer

@Jason Mendoza then definitely; Yardi Matrix is what you want. FYI they are only useful if you're planning on dealing in sizes of 50 units or more. I forgot to ask that, but your post seemed to indicate it.

Dovid Staples · Answer

@Jason Mendoza I would highly recommend looking into Yardi Matrix. Not exactly sure if they are going to meet every detail you're looking for here, but in my opinion they do provide the most comprehensive market data out there.

Wes Blackwell · Answer

@Jason Mendoza

Hey Jason!

When choosing a market, naturally there is a LOT of criteria to consider. Ultimately, it's going to depend on your investment goals and strategy.

For example, if I'm working with someone in the Sacramento market, it's probably going to be a Bay Area investor who'd like to invest in a market with good appreciation and rent growth, but is still located in California, and is lower priced than Bay Area where most deals don't make sense on paper... too pricey.

But if it's Phoenix, Scottsdale or Tempe we're talking about, it might be someone looking to AirBnb / VRBO a small condo in a hot part of town. Most will be from Phoenix, but some will be from other states yet visit here often enough to like the idea of owning something here.

So the best thing to probably start with is your budget, since that's something that often can't change and it definitely can limit your options for market choice.

Then you're going to consider your strategy... are you looking for cashflow? Appreciation? Multifamily? Value-add? AirBnb / Short Term Rentals? Mobile homes? That will limit your options even further.

Then the next thing to consider is the job market and population growth. If people are moving there, that makes for a favorable investor balance in supply vs. demand... that makes for good appreciation and rent growth usually. And that means your investment becomes more valuable over time.

BiggerPockets (of course) is an invaluable resource in connecting to local investors and professionals, who can tell you a lot more about the market (local blogs, Cromford type reports, etc.).

You'd be amazed what you can learn by reading the local news. Simply search "(City Name) Real Estate" and read the news articles from the past 3 years. You'll get a really good sense of what's going on the market over time, where's it's been and where it's headed.

Jason Mendoza · Answer

Excellent!  That's exactly the kind of info I am looking for... Don't need all inclusive be (Utopia thinking), just resources I can piece together to get the best picture I can to make the best decisions... Thanks @Dovid Staples!

Jason Mendoza · Answer

Wes,

Thanks for the response!

My current interests are a "behind the numbers" look at what could demonstrate a strong investment market for the various types of investment.

What resources could be used to demonstrate the strength of one market over another at any point in time and "rank" them accordingly for a specific kind of investment (or business venture).

Personally I would be most interested in buy and hold rentals (or lease options), but any type of data collection can have application for the other types of strategy in the end (exit strategy contingencies, etc.).

I agree that local news is a good source, though it is generally lagging (by about a quarter in most cases).  I definitely need to look into that more as noting/trending the news "sentiment" on some scale could be very helpful.

Thanks again!

Market Choice - Market Analysis Resources/Data accumulation?

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