Isn’t the idea of investing in apartments and making those big incomes exciting?
How about when you add the benefit of huge tax breaks?
It makes the mouth water, doesn’t it?
Well, one important factor in any successful real estate investing career is the market or markets you choose to work in.
Knowledge is power – and power is profit!
Why do people rent?
The first step in getting to know your market is understanding your tenant. After all, this is your end customer – and understanding what they want and why they want it helps you keep your eye on the ball.
The average tenant wants:
- To live near their job.
- To live near their school – university or community college.
- To be close to shopping
- To be in the middle of or fairly close to area hot spots.
They want more than this, of course. This is a good start, though.
So what’s next?
Take a Bird’s Eye View
Now that you have an idea of what your apartment dweller is looking for in a property, you need to look at your market from a higher perspective.
You need to know where the job centers are.
This means business, industry, retail and hospitality.
You also want to know where the higher education centers are in your area, if there are any.
It’s also a good idea to find out where the schools are too, and which schools are the “good” and which are the “bad.”
If you really want to visualize it, get a large area map and mark these things in different colors.
For example, you could shade in or put circles around certain areas of the town or county in red for jobs, blue for colleges, and mark the schools (elementary, middle and high) with a green X’s along with a rating.
This may seem a bit silly, but imagine putting this map up on your wall or a cork-board and then being able to refer to it every time you’re considering buying a property.
You can analyze very quickly the property’s location in relation to these things to see if its location is desirable for your tenants.
Categorize the Parts of your Market
Every market, be it a town or county or even a group of cities, has its separate areas. In most places, a city is divided into named sections.
Get to know these sections of the area – are they high-end or low-rent?
Are they attractive and populated with great shopping, dining and conveniences, or are they run down and undesirable?
This is another layer to your big map – because people will go a bit farther for jobs and schools if the area is desirable.
On the other hand, they don’t necessarily want to live really close to jobs and shopping if the area is a war zone.
Some Final Tips
I can’t go into it all in a short post – yet I don’t want to leave a few important things out.
To wrap up, here are a couple of extra tips you’ll want to think about when searching for apartment properties:
- Locate the community services – fire, police and hospitals
- Tune in to the local news channels and papers.
- Try to tap into the political scene – what’s going on in the area? What’s new, what’s being phased out, etc?
With a strong understanding of social, economic, lifestyle, work, education and politics in a given market, you are well-armed with the information you need to make a wise investing decision. Good luck!
By the way, this is one of the things that Adams investor Group does best.
When we go to purchase a property, we’ve done a careful analysis on not just the apartments – we analyze the area too!
Come and join us and skyrocket your investing profits.
Give me a call or fill out the form for more details.