Metrics for Identifying Target Markets

[Ryan Daniels]

I think a lot of us are having the experience where we learn that our local market may not be suitable for our investment capabilities. I certainly am. I have been consuming a lot of media about investing out of state, or even out of my local area. I see a lot of people asking the same lazy question : "What market should I invest in?!" I don't want to ask that question, because I don't think it has an answer, and I think even spoon feeding someone an answer, they still are unlikely to have success, as they haven't done the requisite homework to evaluate and make best use of even a great answer.

I'm a travel nurse, so I am quite rarely ever home. I'm on the road 3-6 months at a time. This does give me a unique opportunity to visit and "trial" several different cities/states across the US, and evaluate them for investment. I have also lived in a lot of states over the past decade, and I keep them in mind for potential investments. 

My other strategy, which seems way too unwieldy and unfocused, has been to open Google Maps, and pick random cities that I have either heard of, or are adjacent to population centers or natural attractions (mountains, lakes, parks etc), and start looking at Zillow and comparing historical data for the props I see listed to try to gauge where we might be on the bell curve of appreciation. This can not be the best, or even 2nd or 3rd best way to go about this.

So now I'm trying to be more scientific about this. Apart from scanning the news and paying attention to where  players like Amazon will open their next shipping hub, or Apple will re-route its domestic manufacturing plants (assuming they have any?), what hard data can help lead to revelations about what markets are poised to pop and why? Should I be looking at population changes, age, demographics, education levels, home purchases, home construction, and in what way? I'm on the US Census site, and the amount of data is almost overwhelming. 

Apart from the Census Bureau, where else should I look for data? Which data sets, generally, do you think are most helpful for finding target markets?