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Market Study Neglect | International Residential Real Estate Investors Association
Thursday August 17th 2017

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Market Study Neglect

Most investors rely on a review of rent comparables, demographic information, and some loosely connected economic information.  An effective market study collects all of these and more.

An effective market study  should include:

  1. Identify the competition and properties up one tier and down one tier. This includes rents, square footage, occupancy, fees, amenities, and age of construction. Identify historic occupancy rates for the target property and the market in general.
  2. Identify recent sales including rents, square footage, occupancy, fees, amenities, and age of construction.
  3. Define demographic information in the immediate zip code and the submarket.
  4. Define the economic condition in the immediate area, submarket and the market as a whole. Identify key employment industry and business, key employers, and perceived growth drivers.
  5. Identify the tax environment.
  6. Understand tenant rights laws and rent control regulation.
  7. Identify and check the performance of nearby schools.
  8. Identify nearby government facilities.
  9. Note proximity and travel time to employers, schools, shopping, restaurants, entertainment, and points of interest.
  10. Identify traffic count on abutting and nearest arteries.

While this should not be considered the  total information anyone should seek to collect, this is a very good start on a comprehensive market study.

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