Determining the Right Investment Market: A Guide for Investors

Posted by Chris Clothier on Mon, Oct 2, 2017

realestatemarket-investmentmarket.jpgReal estate investors are bombarded with an overwhelming amount of information each and every day.

Whether it’s news and blogs or data from property hunting, there’s just a lot to sift and sort through. And there’s never more information to deal with than when looking for new targets to add to your portfolio.


For the real estate investor, deciding where to invest is a crucial decision. It can come with risks and—to put it plainly—can make or break your investment future! Invest in the right real estate markets and you could see success beyond your expectations, but make the wrong choice and you may find yourself drowning financially.


So how do you make that all-important decision on an investment market?


Here are our top tips on determining where you should invest in real estate.


5 Tips on Discerning the Best Markets for Investing in Real Estate

Look at Recent Projects, Construction & Activity in the Area

Good markets are active markets—if other people are interested in dealing in the market in question, it’s likely that you’d do well to deal in it, too. Look at news, press releases, and other media regarding real estate and new construction not just in the cities, but in the specific neighborhoods that you want to invest in.


If there’s new construction projects, you know that other investors see value in the area. If there’s a good pace of home sales in general and strong market activity, it’s a good indicator of market health.

Ask Where Overall Market Trends Are Heading

While you can’t predict everything, there is certainly something to be said of watching market trends. What have property values looked like over the last year? Five years? Ten? What about sale prices? What are current projections and outlooks? There’s not much point in investing in a market whose glory days are far in the past.


Also consider how individual properties stack up to trends. Do the prices make sense with what you know of the surrounding area? It’s always good to be knowledgeable of what’s going on and what’s been going on in the market! Be informed!

Observe Neighborhood Demographics & Data

The better you can know your market, the better off you’ll be. Especially if you’re expanding outside of your local market, which you likely know very well, a long-distance real estate market might demand investigation. You need to know not just what you’re getting into, but who you’re going to be selling to, competing with, and working with!


Get acquainted with things like crime statistics (how much crime, what kinds of crimes, where is the crime), local amenities and attractions, popular places, up-and-coming areas, and maybe those that are on the way out. You need to know your market as if you’ve lived there your whole life! And if you can’t, find someone who does and learn from them.

Consider Your Price Point Compared to Market Values

One of the best strategies you can utilize is to pick an investment market based on your own price point. For instance, if you live in a market that has a higher cost of living, invest in a market that has a lower or mid-range cost of living. Your dollar will go further there! You can invest in properties that are nice for a fraction of the cost you would find in your own market.


Naturally, if you’re not in a particularly high dollar market yourself, this strategy only goes so far. But at the very least, you can avoid markets that you just can’t afford. Steer clear of NYC and San Francisco, as tempting as they are. They’re just too pricey! Secondary and tertiary markets, like Memphis, Dallas, and Houston, have much better and smarter opportunities.

 

Utilize Technology

Technology is so valuable for real estate investors. Beyond simply using sites like Trulia, Zillow, and Redfin to get your listings and demographics, there’s also using things like Google Maps and their street view function to get digital eyes on the ground in virtually any market in the world. While you may not be able to practically visit every market, you can open your web browser and take a look.


When you’re searching for a market to invest in, especially a remote real estate market, one of the best assets you can have is a turnkey real estate partner. Memphis Invest is here for you! Lean on our years upon years of market expertise.


We already have properties ready for you, ready to generate cash flow. All you need to do is pick up the phone and start the conversation.

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Topics: real estate market