Accurate Market Analysis

[Shayne Mahoney]

What steps do investors take to accurately analyze a market? 

[Lien Vuong]

There's several metrics to what an investor uses to analyze deals in certain area and what they deem to be  a 'good deal'. To list a few:

1: Looking at comparable in the area of what has SOLD - make sure it's sold because what it's for sale for is not a dictation of market absorption

2. Reading the local news about the town or region to figure out developments in the local area that would increase value and speed up appreciation of home - i.e rail ways, large developments, new high way exits, etc.

- Conversely, look at things in the area that indicate a declining market where the prop. could decrease in value

3. Researching market rents and what that area can dictate. If the current prop. has low rents, why?, house condition? ignorance of landlord? location? - answer is not always that the landlord didn't want to be mean to the tenants and increase rent. 

4. Research local cap rates and what are the expected returns of that area

5. Management cost and type of tenants, are tenants going to be C class with low income and needy or more A class and demanding of pristine units?

Those are a few of the metrics I use to analyze an area... Hope that clarified things.