Importance of Market Analysis in Real Estate Investing

This chapter emphasizes the importance of market analysis in real estate investing, focusing on the impact of supply and demand, population growth, job growth, and median age. It discusses the trade-off between markets with great cash flow and those with great appreciation. The chapter also highlights the significance of considering the tenant pool and economic growth when choosing a real estate investing market.

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Before you buy your first rental property, you’ll need to choose a real estate market. If you’re like many Americans, your own backyard may not offer what you want out of an investing area. So, where do you go to find cash flow or appreciation? Today, we’re walking you through choosing a real estate investing market, the metrics to look for, signs of growth and decline, and which markets offer investors the biggest benefits.

How hard is it to do market research? If you have access to the internet, you can research a market in a matter of minutes. But knowing WHAT to research is the most crucial part. Dave Meyer, VP of Market Intelligence at BiggerPockets and host of the On the Market podcast, shares his steps to market analysis and how he analyzes each market to ensure it’ll make him the most money in the long run.

We’ll touch on population and migration, supply and demand, vacancy rates, rent-to-price ratios, landlord vs. tenant-friendly states, and the telltale signs that a market will have high or low cash flow. So before you buy your first or next rental property, make sure you do THIS research!

In This Episode We Cover:

How to choose a real estate market in 2024 (market analysis 101)

The market “fundamentals” that show whether an area is worth investing in

Vacancy rates and signs that you’ll have a HARD time finding tenants

The 1% rule and whether or not we’d still use it in 2024

Cash flow vs. appreciation markets and who should NOT be chasing cash flow

Tenant vs. landlord-friendly states and how to quickly tell which is which

And So Much More!

Links from the Show

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BiggerPockets Youtube Channel