What sites have you used to analyse/find your target market?

Question

I am torn between Ocala, Coral Gables, JVille & Gainesville.

Where did you find your data other than the census to arrive at your target market?

What criteria did you use to find employment trends, accurate rental rates etc?

I am looking for LTR for appreciation and avoiding negative cash flow and scaling.

Clay Lehman · Answer

@Michelle Reid I am an investor/broker/property manager in Ocala. Zumper has a tool that allows you to find the rental rates at the zip code level for different bed/bath combos. I used that one when we were looking for deals for one of our clients across the state. I wouldn't use that as a definitive tool to set my rent rates, but I think it is good enough to give you a reasonable idea of what the rents will be. You can use that rental rate and the median home prices to give you an idea of your cap rate. Most cities will have chamber of commerce websites that will provide info about the cities employment and growth potential. I would look at those but obviously take them with a grain of salt because they are going to put their best foot forward. In terms of criteria, I like looking at the employment data that the Department of Labor provides to see how concentrated the labor is in any one industry. I would avoid areas with a high concentration in anyone industry, for example, Orlando has a high concentration in the tourism industry and when Covid hit they got crushed. It was only temporary but that is an example of what can happen with high concentration of labor.

I hope this info is helpful, good luck in your journey!!!

Kerry Baird · Answer

I started with knowing I didn't want pipes to freeze if we got a tenant turnover.  LOL

Census was next, to ensure 100,000 and growing populations.  Job diversity has been important to me.  We happened to be Air Force, and I started with the housing allowance that military members receive.  My thought was that would be a great starting point for a rental amount I could expect from a policeman/teacher/blue-collar trending upward kind of tenant.  So starting with the BAH, could I make at least $200 a month after all expenses?

That has been a terrific trajectory over many years, until I switched over the short term rentals, which are a nicer quality and therefore more expensive type of house.

I don't prefer collegiate cities as a personal preference.  So I would toss out Gainesville.  I have recently completed a tour of Ocala and it has a lot going for it with a Chewy's plant and new billion dollar horse facility.  Jacksonville has been growing and there is a lot of new build in the area.  It is a good MSA for investing.  The same folks I went to Ocala with are building new construction in Coral Gables, and that area has a really nice feel to it.

Ryan Hamaker · Answer

I've used STDB.com for years to look at:

a) Population size

b) Population Growth/Decline

c) Average income per capita in a target range of 3 miles

d) Education levels in target areas

e) Several other factors related to commercial statistics

It's a paid membership site but worth every penny if you're trying to drill down the exact kind of area and population target for your acquisitions.

Clay Lehman · Answer

That is a great question.  I don't think we have great forward indicators.  I think maybe looking at housing starts and forecasting them to be completed in 8 months or so.  But that is hard to get granular on, meaning, I don't think you can tell a 3/2 1,400 sq ft starter home from a 500,000 move-up.  There are a number of projects that have been approved in the last 18-24 months, I am not sure when they will start delivering houses.  I am currently building spec houses, just 2 or 3 at a time.  I buy 2 or 3 lots, build the houses and when I get close to done, review the market to determine if I keep going or pause.  I feel like 2022 will be strong but that interest rates and higher inventory could mean we are slower in 2023.

But short answer to your question is probably housing starts would be the best forward indicator of potential saturation.  I will research the best place to get that info.

Not to be long-winded (probably too late) but the other thing I keep a close eye on is the average days on market in my property management company.  I feel like that rentals represent real demand, meaning while we don't know for sure if a home sale is to an investor or an owner occupant, when I rent a home, I know that the person is renting it to live in it.  Our average DOM in January was 5.5.  This is super low.  It feels like less than a year or 2 ago, we were bragging that we were under 14 days and now we are under 6?  December had creeped up on us (DOM was 12) but I think that was seasonal/omicron related.  It is hard to call anything a trend with just one month data either way.  But even if you are talking about an avg of 12 days on market, that is really strong housing demand.

Michelle Reid · Answer

@Clay Lehman very helpful. Thank you. Are there any indicators that would forecast saturation?

Michelle Reid · Answer

@Chris Levarek Thank you.  Those sites are very useful. It is difficult to decide where to even start with the full analysis so those are very helpful.  You post is great too.  Can I just use your work?  That would be so much easier.

@Alex Hernandez Thank you. I will reach out.

@Kerry Baird I like that housing allowance indicator.

Chris Levarek · Answer

@Michelle Reid We use reports from various sources, broker conversations and even such platforms as AirDNA/mashvisor for STR.

Reports typically come from IRR .com, Zillow, Realtor, YardiMatrix, RealPage, Multihousingnews .com, public.tableau. com (various sources), UHUAL, Urban Land Institute , etc.

Here is an example of what you can find : https://www.biggerpockets.com/...

Alex Hernandez · Answer

I'm a property manager in ocala if you'd like connect with me and we can discuss for the criteria I use to recommend to our investors for rentals I have one post talking about some of the things I tell my investors when they're thinking of buying in ocala our broker has 15+ years in property management

What sites have you used to analyse/find your target market?

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