How To Pick Your Market – Real Estate Investors Should Consider These Things

If you’re interested in investing in the real estate market, listen up.

There are a few things you should consider when picking a specific market.

In this video, we are going to discuss how to choose the best market for your investment goals.

Transcript:

The thing is, in the US there’s not a real estate market, right. And you know this, I want to make sure everyone listening knows this. There’s not a real estate market in the United States. Different kinds of real estate are in different part, different stages of the market cycle. Single family homes cycles are not the same as multifamily real estate cycles, are not the same as commercial- Right. Everything has a different cycle, where it’s a good time to buy or a good time to sell, or a good time to hold. I want everyone to think about this, because, I’ve learned about all different kinds of real estate investing, so that when it’s the right time to do this asset class, I could do that asset class. When it’s the right time to do this other thing, I can do that another thing. I also want to call out that each location in the United States is really different.

For instance, when the real estate marke in Houston is doing something, the real estate market in San Francisco is doing something else. They’re not doing the same thing. For instance, Phoenix. We all know what was going on in Phoenix, if you’re a real estate investor over the last couple of years. It was like the place to be, the hot market, like everyone was just screaming to get in there and now the reports are coming out that it’s like, it’s the number one place for rental decline in the United States, these sorts of things, while Houston, the rental rates are going up 12, 16% per year. Phoenix and Houston not doing the same thing. It’s really important when you’re an investor.

It’s really different from the last person you had was speaking about, when you’re buying your home. You’re you’re spending money on real estate, because of you personally, your emotions, where you want to live. When you’re investing, it should be totally not correlated with where you want to live. You don’t have to live there. If it’s investment property, whether it’s an Airb&b, or single family home rental that you have or duplexes, or if you’re in something passive, like a REITs, or multifamily syndication, which is what I do, those are 100% passive. It doesn’t matter where they are, someone else is operating it for you. And so you’re going on a look at the markets that are still performing really strong, given what’s going on in the rest of the United States, right?

There’s data you can look at, that’s relative data and then there’s absolute data. Like unemployment rate, you’re gonna want to look at relative data, what’s the unemployment rate in Houston versus the rest of the United States that tells you where people are going, where the jobs are going. Supply is going up, but not as fast as demand is going up. That’s a great place to have product. I love that question. Because it’s like, I could talk for an hour on what’s the real estate market doing because each city, each MSA is really different. I live in California, I live in San Francisco, I will not buy investment property in California. But I’m all over Texas. I’m all over Alabama, I’m all over the Carolinas.

There’s other really great markets and you got to look at all that kind of stuff and you look at job trends to know which is really influenced by local government and incentives that they’re giving and those sorts of things in order to see where people are migrating to. Especially right now, migration happens really fast, right? We saw that in moving companies put out this data like, what’s number one ingress cities. So you can see, Okay. Number one place everyone’s moving to, number one place everyone’s leaving, you know where to buy and sell them.