What type of real estate investor are you?

By this I mean do you like big piles of cash or a steady stream of cash that flows into your bank account over time?

In other words, are you a passive investor who lets active investors use your cash and/or credit in their deals so you earn returns without lifting a hammer or handling the daily operations?  – Tweet  

Either way, you need to look at different markets for your potential investments to make sure they are in alignment with your goals. In short, you really need to understand your market(s).

So, how do you choose markets that are right for you and your investing endeavors?

Because I keep getting this question, let’s dive into the 5 things you really need to consider when choosing a market. I you want to cut to the chase and learn the information quickly, watch this video:

There are 5 top things to consider when choosing investment properties…

When considering the right markets for you your rental property investments, you know to look at the demographics, economics and the political climate of the areas in which you are looking for properties.

I’ve covered these criteria in prior articles and videos.

Let’s drill down to the top 5 things my team and I look at when choosing a market and properties.

Location

You will use your investment property to create cashflow through rents or you will participate with someone who does so you can earn interest ongoing and then get your original investment back at the end of a specified term. In my case, that means investing in multifamily rental properties. More specifically, larger and larger properties. For example, a 50- or 120-unit apartment building would be ideal. Right now I have smaller units, but I have been growing my portfolio. It now includes a pretty nice mobile home park. It is well-maintained and has great management in place. It also has lots of room for expansion, so I couldn’t be happier with it. This property attracts the right type of tenants… those who pay on time each month and cause no problems. The location is very important. This mobile home park is not far outside of Charlotte, NC. I did a lot of research to find that specific market. I’ve written about it a few times, so I will not go into detail here. I suggest that you browse a few articles related to Charlotte.

Population

Do you prefer larger markets or secondary markets? My team and I always look for properties in areas with a population of more than 300,000. There are reasons. With that demographic we know that we will find a large and stable pool of tenants. All we have to do is make the properties attractive to them, and I’ve written articles about that, too. I invite you to read about the ways to attract the right tenants.

Jobs

How strong is the job market in the locations you are considering for your rental properties? What are the types of jobs? Are they stable jobs? You want to see stable employment trends, because that translates to your tenants’ ability to steadily pay rents. You want your tenants to be with you a long, long time. The longer the better!

Unemployment

If there are lots of job opportunities but high unemployment, you need to be very aware of that trend. You don’t want to see it happening in the areas where you are looking for rental properties. If you do see it, that’s not a good market. It means you won’t be able to attract and retain good tenants. In fact, your renters won’t be able to pay you rent if they lose their jobs, so be very wary of unemployment statistics. You can find them online inside city websites.

Key Industries/Companies

What are the key industries and big companies in the areas you are considering in regard to buying rental properties? How long have these businesses been in operation in the area? How many people do they employ? Is there big turnover or are the employees in place for long periods of time? What do these companies produce or what services do they provide? Are these things something that are going to be around for the long term? What are their future plans? Every bit of this information is readily available to you online. All you have to do is take the time to do the research.  – Avoid choosing property markets where industries and businesses are only trending for now and will be gone in a couple of years.  – Tweet  


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As you can see, you have a bit of research to conduct when choosing rental property markets. This especially holds true when you are looking to invest in multifamily properties and apartment buildings. What is happening in the locations you are considering has to be in alignment with the type of customer (a.k.a., renter) you wish to serve!

You know what would have been terrific when I first started investing in rental properties? This kind of guidance and information! But it was harder to find a few years back. That’s why I provide it to you in short video form and in my articles, all of which I hope you will find time to read!

As with every piece and video, I like to leave you with a question that means something. Here’s my question for today’s lesson:

Of the 5 things I just shared with you, which was the newest for you that will help you get out there and find your next rental property?

If you like information like this, I have great news. I regularly offer free information to help you become a better, more effective passive or active real estate investor. I cover topics that will help you… because it’s all the stuff I had to learn along the way. New content is published on this site every Thursday!

Additionally, from time to time I offer very affordable 4-week master classes covering a variety of helpful topics that are intended to move you forward to your investment goals.

Plus, I’ve intentionally created a very supportive Facebook group. If you haven’t yet joined me there, please do. Here’s the link:

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