Quick Market Analysis

[Spencer McNeal]

When searching for markets to look for deals in, more so long distance markets, what tools do you use to decide whether that city, or specific neighborhood, are worth even looking for deals in? Almost like a precursory scan. For example, you probably wouldn't want to be near the East La Loma / El Vista area in Modesto... or just about anywhere in Stockton. So how would you go about identifying these types of areas in other cities?

 I know ideally you would want to reach out to RE agents and others familiar with the area but that takes time. So, before you even do that, how do you decide if it's worth reaching out to people in that area?

I guess I'm referring to something like CityData; and if that is a tool that you use, what are you looking for specifically?

[Scott Passman]

@Spencer McNeal When I do a quick scan of a market the first things I look at are the following:

1. Population growth- should see steady growth over time (citydata.com, bestplaces.net)

2. Rent/Buy ratio- I'm looking to see ratios around the 1% mark to see if it is a viable market for rentals (Zillow.com, rentometer.com)

3. Diversity of job market- don't want most of the jobs in just a couple industries, better to have a good variety of jobs for stability (Citydata.com, bestplaces.net, bureau of labor and statistics)

4. Crime- Is it a relatively safe area or is crime very high? (I look at citydata.com and trulia.com)

5. Ancillary factors- school district ratings, proximity to airports/hospitals, building trends to see where the growth is occurring etc. 

If 1-4 look promising then I start looking deeper into the market with some of the ancillary factors and try to learn as much as I can about it to determine if it looks like a promising place to invest. Hope that helps.