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Updated 2 months ago, 09/20/2024
Newbie: Am I doing out of state market research for my first market right?
Hey BP! This is my first post. I'm totally new to REI. I live in WA State and the numbers in my home market don't look great for me, so I'm looking out of state at SFH's and trying to nail down a city/market to get started in. I'm building a spreadsheet to slice and dice. Below are some of the data points I'm looking at in each city, what would you add/subtract, or roast me for? :)
1. Number of Zillow Total Active Listings (SFHs
2. Number of Zillow listings in my price range, and the percentage of homes in my range against Total Active's (to try and understand if there are enough in my price range).
3. Population Size
4. Population Growth/Decline (If the population is growing or declining over the last 5 years).
5. Population Size
6. Job Growth (Growing vs Declining) Percentage (To try and understand if the local job market will continue to grow or decline).
7. Number of Major Employers (To try and understand if the local economy is resistant to losing a big employer, or if that would crush the economy)
8. Redfin YoY Home prices appreciation by percentage
9. Rent prices increases by percentage (is rental prices increasing or declining to indicate rental market strength)
10. Wage increases by percentage (are job wages increasing or declining to indicate job market strength)
11. Is the State Landlord Friendly (Yes or No)
12. Are there enough Property Managers with enough properties under management and deep enough vendors bench, or is it small shops
13. Floodzone risk (Severe, High, Moderate, Minor)
Am I on the right track? Roast my data or give me some advice :)
#3 Ask About A Real Estate Company Contributor
- Rental Property Investor
- Denver, CO
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#3 Ask About A Real Estate Company Contributor
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@Sam Rexford welcome to BP! It sounds like you have already done quite a bit of research on important things to consider when looking at a new market to invest in. The US is a very diverse space with many different markets to consider. I think all the criteria you've outlined are very good data points. Additionally, we like to look at rent trends over the past 5 years, average leasing times, % of homeowners to tenants for the market as a whole and specific neighborhoods, tax structure for both properties and income and affordability. We like to invest in areas below the median house price which sits around $400K. We've found the most success the midwest and southeast in markets that still cash flow very well, but also see strong appreciation in both rents and home values.
I think you are off to a great start to research a new market to invest in. Don't get caught up in analysis paralysis as we all can over analyze markets forever. Really it comes down to investing in a growing market, in a good neighborhood & building a great team to support you. That can be a lot of time and work if your are doing on your own. An easier path to break into a new market might be investing in turnkey properties with a reputable team. That is what our team at Rent To Retirement has been helping investors do for a decade now BP. We are happy to answer any questions you have about analyzing markets or getting started. Most importantly, choose a market that aligns with your goals!
Wishing you the best of success in your market research!
Zach
- Zach Lemaster
- [email protected]
- 800.311.6781
- Podcast Guest on Show How to Fund Real Estate Deals Right Now
Columbus, Ohio is a great market to consider if you're looking for appreciation markets that still cash flow. I moved here from Florida after seeing the expansive growth in the Columbus market.
There are multiple billion dollar companies dumping money into the city, such as Intel, Google, Honda, and Amazon. This is causing a huge influx of people moving here for jobs. And a lot of start-up companies are migrating to this city as well because of the OSU campus that has thousands of talented students graduating and looking for positions locally.
Everything that’s going on here in Columbus is attracting investors and other businesses from all over. A recent study showed that 80 people are moving to this city every single week, which will continue to increase housing demand.
- Samuel Diouf
- [email protected]
- (614) 662-1652
You're on the right track. Have your goals and "you're investing because" guide your decisions on where to invest. These might change over the years. Number 13 I'd change to Insurance. There are other risks in different markets that will drive insurance costs.
Hey Sam,
These are solid questions. It's great to look at the different data points, but ultimately, it depends on what your goals are.
Are you wanting cashflow? Do you want to flip properties? How long are you planning on holding the properties?
Getting clear on what you want will help you narrow down to cities that are potentially a great fit for what you're looking for. Once you have a narrow list, then you can dive deep into which is the best option for you.
Quote from @Sam Rexford:
Hey BP! This is my first post. I'm totally new to REI. I live in WA State and the numbers in my home market don't look great for me, so I'm looking out of state at SFH's and trying to nail down a city/market to get started in. I'm building a spreadsheet to slice and dice. Below are some of the data points I'm looking at in each city, what would you add/subtract, or roast me for? :)
1. Number of Zillow Total Active Listings (SFHs
2. Number of Zillow listings in my price range, and the percentage of homes in my range against Total Active's (to try and understand if there are enough in my price range).
3. Population Size
4. Population Growth/Decline (If the population is growing or declining over the last 5 years).
5. Population Size
6. Job Growth (Growing vs Declining) Percentage (To try and understand if the local job market will continue to grow or decline).
7. Number of Major Employers (To try and understand if the local economy is resistant to losing a big employer, or if that would crush the economy)
8. Redfin YoY Home prices appreciation by percentage
9. Rent prices increases by percentage (is rental prices increasing or declining to indicate rental market strength)
10. Wage increases by percentage (are job wages increasing or declining to indicate job market strength)
11. Is the State Landlord Friendly (Yes or No)
12. Are there enough Property Managers with enough properties under management and deep enough vendors bench, or is it small shops
13. Floodzone risk (Severe, High, Moderate, Minor)
Am I on the right track? Roast my data or give me some advice :)
Hi Sam! This is a pretty solid list. I would add a few things depending on your goal/strategy. You can check vacancy rates, property taxes, ARV, rehab costs, and days on market. Happy to connect and answer your questions.
- Jimmy Lieu
- [email protected]
- 614-300-7535
Quote from @Zach Lemaster:
@Sam Rexford welcome to BP! It sounds like you have already done quite a bit of research on important things to consider when looking at a new market to invest in. The US is a very diverse space with many different markets to consider. I think all the criteria you've outlined are very good data points. Additionally, we like to look at rent trends over the past 5 years, average leasing times, % of homeowners to tenants for the market as a whole and specific neighborhoods, tax structure for both properties and income and affordability. We like to invest in areas below the median house price which sits around $400K. We've found the most success the midwest and southeast in markets that still cash flow very well, but also see strong appreciation in both rents and home values.
I think you are off to a great start to research a new market to invest in. Don't get caught up in analysis paralysis as we all can over analyze markets forever. Really it comes down to investing in a growing market, in a good neighborhood & building a great team to support you. That can be a lot of time and work if your are doing on your own. An easier path to break into a new market might be investing in turnkey properties with a reputable team. That is what our team at Rent To Retirement has been helping investors do for a decade now BP. We are happy to answer any questions you have about analyzing markets or getting started. Most importantly, choose a market that aligns with your goals!
Wishing you the best of success in your market research!
Zach
Thank you! Analysis paralysis is my specialty 🤣 I'm interested in turn key properties for section 8 as one possibility. Happy to connect and discuss some time.
Quote from @Jimmy Lieu:
Quote from @Sam Rexford:
Hey BP! This is my first post. I'm totally new to REI. I live in WA State and the numbers in my home market don't look great for me, so I'm looking out of state at SFH's and trying to nail down a city/market to get started in. I'm building a spreadsheet to slice and dice. Below are some of the data points I'm looking at in each city, what would you add/subtract, or roast me for? :)
1. Number of Zillow Total Active Listings (SFHs
2. Number of Zillow listings in my price range, and the percentage of homes in my range against Total Active's (to try and understand if there are enough in my price range).
3. Population Size
4. Population Growth/Decline (If the population is growing or declining over the last 5 years).
5. Population Size
6. Job Growth (Growing vs Declining) Percentage (To try and understand if the local job market will continue to grow or decline).
7. Number of Major Employers (To try and understand if the local economy is resistant to losing a big employer, or if that would crush the economy)
8. Redfin YoY Home prices appreciation by percentage
9. Rent prices increases by percentage (is rental prices increasing or declining to indicate rental market strength)
10. Wage increases by percentage (are job wages increasing or declining to indicate job market strength)
11. Is the State Landlord Friendly (Yes or No)
12. Are there enough Property Managers with enough properties under management and deep enough vendors bench, or is it small shops
13. Floodzone risk (Severe, High, Moderate, Minor)
Am I on the right track? Roast my data or give me some advice :)
Hi Sam! This is a pretty solid list. I would add a few things depending on your goal/strategy. You can check vacancy rates, property taxes, ARV, rehab costs, and days on market. Happy to connect and answer your questions.
This is fantastic thank you! 🙏 I'm looking at section 8 program currently, these look like good additions to my spreadsheet. Happy to connect!
Quote from @Danny Gonzalez:
Hey Sam,
These are solid questions. It's great to look at the different data points, but ultimately, it depends on what your goals are.
Are you wanting cashflow? Do you want to flip properties? How long are you planning on holding the properties?
Getting clear on what you want will help you narrow down to cities that are potentially a great fit for what you're looking for. Once you have a narrow list, then you can dive deep into which is the best option for you.
I appreciate it thank you!
Quote from @Bradley Buxton:
You're on the right track. Have your goals and "you're investing because" guide your decisions on where to invest. These might change over the years. Number 13 I'd change to Insurance. There are other risks in different markets that will drive insurance costs.
Great point on the insurance metric. Makes sense! Ty!
Quote from @Samuel Diouf:
Columbus, Ohio is a great market to consider if you're looking for appreciation markets that still cash flow. I moved here from Florida after seeing the expansive growth in the Columbus market.
There are multiple billion dollar companies dumping money into the city, such as Intel, Google, Honda, and Amazon. This is causing a huge influx of people moving here for jobs. And a lot of start-up companies are migrating to this city as well because of the OSU campus that has thousands of talented students graduating and looking for positions locally.
Everything that’s going on here in Columbus is attracting investors and other businesses from all over. A recent study showed that 80 people are moving to this city every single week, which will continue to increase housing demand.
Thank you for this, yup it's on my spreadsheet along with other OH cities... Happy to connect sometime.
Quote from @Sam Rexford:
Quote from @Samuel Diouf:
Columbus, Ohio is a great market to consider if you're looking for appreciation markets that still cash flow. I moved here from Florida after seeing the expansive growth in the Columbus market.
There are multiple billion dollar companies dumping money into the city, such as Intel, Google, Honda, and Amazon. This is causing a huge influx of people moving here for jobs. And a lot of start-up companies are migrating to this city as well because of the OSU campus that has thousands of talented students graduating and looking for positions locally.
Everything that’s going on here in Columbus is attracting investors and other businesses from all over. A recent study showed that 80 people are moving to this city every single week, which will continue to increase housing demand.
Thank you for this, yup it's on my spreadsheet along with other OH cities... Happy to connect sometime.
Sounds good, happy to share a graded map of the area.
- Samuel Diouf
- [email protected]
- (614) 662-1652
Hey @Sam Rexford, this is a very thorough start! You may find this webinar by Dave Meyer helpful: “How to Choose a Market for Your First or Next Real Estate Deal in 2024" at bigmarker.com/biggerpockets2/DM-CM. I'd also recommend checking out the Market Finder tool (biggerpockets.com/markets) for a quick way to compare markets and narrow your search to a few top-performing areas.
#2 Out of State Investing Contributor
- Flipper/Rehabber
- Pittsburgh
- 3,711
- Votes |
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- Posts
#2 Out of State Investing Contributor
- Flipper/Rehabber
- Pittsburgh
you're trying to boil the ocean. pick a market this way.
a place you used to live in, or went to college in, or have family, or like to vacation in, or know really well.
also: consider investing closer to where you live. i know, i know - you're going to tell me it's "too expensive." you know what else is expensive? buying a money pit you haven't seen in a market you don't know thousands of miles away, and then being beholden to agents and contractors and others you've never met.
https://www.biggerpockets.com/forums/48/topics/1137397-balti...
https://www.biggerpockets.com/forums/48/topics/1160450-run-i...
https://www.biggerpockets.com/forums/963/topics/1195280-expe...
the market right now is unforgiving and it's going to take something difficult or creative to be successful. so if all your fellow WA investors think WA is "too expensive" - then do something different than the masses.
hope this helps
#3 Ask About A Real Estate Company Contributor
- Rental Property Investor
- Denver, CO
- 3,650
- Votes |
- 1,873
- Posts
#3 Ask About A Real Estate Company Contributor
- Rental Property Investor
- Denver, CO
Quote from @Sam Rexford:
Quote from @Zach Lemaster:
@Sam Rexford welcome to BP! It sounds like you have already done quite a bit of research on important things to consider when looking at a new market to invest in. The US is a very diverse space with many different markets to consider. I think all the criteria you've outlined are very good data points. Additionally, we like to look at rent trends over the past 5 years, average leasing times, % of homeowners to tenants for the market as a whole and specific neighborhoods, tax structure for both properties and income and affordability. We like to invest in areas below the median house price which sits around $400K. We've found the most success the midwest and southeast in markets that still cash flow very well, but also see strong appreciation in both rents and home values.
I think you are off to a great start to research a new market to invest in. Don't get caught up in analysis paralysis as we all can over analyze markets forever. Really it comes down to investing in a growing market, in a good neighborhood & building a great team to support you. That can be a lot of time and work if your are doing on your own. An easier path to break into a new market might be investing in turnkey properties with a reputable team. That is what our team at Rent To Retirement has been helping investors do for a decade now BP. We are happy to answer any questions you have about analyzing markets or getting started. Most importantly, choose a market that aligns with your goals!
Wishing you the best of success in your market research!
Zach
Thank you! Analysis paralysis is my specialty 🤣 I'm interested in turn key properties for section 8 as one possibility. Happy to connect and discuss some time.
We are all there at one point or another. Yeah, happy to connect and discuss options. Just PM me. I'm happy to help however I can.
- Zach Lemaster
- [email protected]
- 800.311.6781
- Podcast Guest on Show How to Fund Real Estate Deals Right Now
Quote from @Sam Rexford:
Hey BP! This is my first post. I'm totally new to REI. I live in WA State and the numbers in my home market don't look great for me, so I'm looking out of state at SFH's and trying to nail down a city/market to get started in. I'm building a spreadsheet to slice and dice. Below are some of the data points I'm looking at in each city, what would you add/subtract, or roast me for? :)
1. Number of Zillow Total Active Listings (SFHs
2. Number of Zillow listings in my price range, and the percentage of homes in my range against Total Active's (to try and understand if there are enough in my price range).
3. Population Size
4. Population Growth/Decline (If the population is growing or declining over the last 5 years).
5. Population Size
6. Job Growth (Growing vs Declining) Percentage (To try and understand if the local job market will continue to grow or decline).
7. Number of Major Employers (To try and understand if the local economy is resistant to losing a big employer, or if that would crush the economy)
8. Redfin YoY Home prices appreciation by percentage
9. Rent prices increases by percentage (is rental prices increasing or declining to indicate rental market strength)
10. Wage increases by percentage (are job wages increasing or declining to indicate job market strength)
11. Is the State Landlord Friendly (Yes or No)
12. Are there enough Property Managers with enough properties under management and deep enough vendors bench, or is it small shops
13. Floodzone risk (Severe, High, Moderate, Minor)
Am I on the right track? Roast my data or give me some advice :)
Sam, I got you covered. I took a look at some markets and made a quick video for you to help you out on this process.
https://www.loom.com/share/79170bf16882465e8fca26369a1fa1a7?...
Quote from @Donato Callahan:
Quote from @Sam Rexford:
Hey BP! This is my first post. I'm totally new to REI. I live in WA State and the numbers in my home market don't look great for me, so I'm looking out of state at SFH's and trying to nail down a city/market to get started in. I'm building a spreadsheet to slice and dice. Below are some of the data points I'm looking at in each city, what would you add/subtract, or roast me for? :)
1. Number of Zillow Total Active Listings (SFHs
2. Number of Zillow listings in my price range, and the percentage of homes in my range against Total Active's (to try and understand if there are enough in my price range).
3. Population Size
4. Population Growth/Decline (If the population is growing or declining over the last 5 years).
5. Population Size
6. Job Growth (Growing vs Declining) Percentage (To try and understand if the local job market will continue to grow or decline).
7. Number of Major Employers (To try and understand if the local economy is resistant to losing a big employer, or if that would crush the economy)
8. Redfin YoY Home prices appreciation by percentage
9. Rent prices increases by percentage (is rental prices increasing or declining to indicate rental market strength)
10. Wage increases by percentage (are job wages increasing or declining to indicate job market strength)
11. Is the State Landlord Friendly (Yes or No)
12. Are there enough Property Managers with enough properties under management and deep enough vendors bench, or is it small shops
13. Floodzone risk (Severe, High, Moderate, Minor)
Am I on the right track? Roast my data or give me some advice :)
Sam, I got you covered. I took a look at some markets and made a quick video for you to help you out on this process.
https://www.loom.com/share/79170bf16882465e8fca26369a1fa1a7?...
Very cool and appreciate you doing this, I will look as soon as i'm able!
Quote from @Nicholas L.:
you're trying to boil the ocean. pick a market this way.
a place you used to live in, or went to college in, or have family, or like to vacation in, or know really well.
also: consider investing closer to where you live. i know, i know - you're going to tell me it's "too expensive." you know what else is expensive? buying a money pit you haven't seen in a market you don't know thousands of miles away, and then being beholden to agents and contractors and others you've never met.
https://www.biggerpockets.com/forums/48/topics/1137397-balti...
https://www.biggerpockets.com/forums/48/topics/1160450-run-i...
https://www.biggerpockets.com/forums/963/topics/1195280-expe...
the market right now is unforgiving and it's going to take something difficult or creative to be successful. so if all your fellow WA investors think WA is "too expensive" - then do something different than the masses.
hope this helps
This does help thank you. I think a lot feel as I do, that their home territory is too expensive. I'm sure that's just inexperience and illiteracy in REI leading me to that conclusion and I'm sure there's great deals around me, I'm just not sure how to look for them or go about that - I know I know, "build a network, dial for deals" etc, yeah I can do all that but my gut feeling is that the market is pretty cooked here rn where in other places there's room to grow still. I totally agree it would be ideal to buy in my back yard. Just genuinely not sure how to go about it here. I know that if I could get my foot in the door that long term profitability is relative, but entry point here is much higher. Thank you sir.
Quote from @Account Closed:
Hey @Sam Rexford, this is a very thorough start! You may find this webinar by Dave Meyer helpful: “How to Choose a Market for Your First or Next Real Estate Deal in 2024" at bigmarker.com/biggerpockets2/DM-CM. I'd also recommend checking out the Market Finder tool (biggerpockets.com/markets) for a quick way to compare markets and narrow your search to a few top-performing areas.
TYSM!