Real Estate Success: Knowing Your Local Market
November 11, 2013
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Finding Real Estate Success: Knowing Your Local Market
This Rich Dad Education investing series focuses on identifying the common variables that determine student success. Students who attend Rich Dad Education elite trainings receive knowledge on how to broadly apply specific strategies and techniques in their real estate investing career. Students who participate in the Rich Dad Education mentoring program further hone their skills on their chosen techniques and start to learn how to apply them in their local market. Learning about the specific market that you are investing in is crucial. This knowledge plays a critical part in determining student success.
Understanding Your Market
Rich Dad Education students who find high levels of success normally have spent a great deal of time studying their market. They develop true expertise, not only in the area of training they have received, but also in how to apply that training in their local market. In essence, they know almost everything about the local market they invest in.
For new real estate investors, this might seem like a daunting task. Naturally, this type of expertise does not come overnight, but you would be surprised at how quickly you can gain a basic understanding of the market you are investing in. True expertise will develop over time as you apply your trade and continue to study the characteristics of your market.
Once Again, Start One Step at a Time
The advice to start one step at a time applies in the study of your local market as well. Start with a singular area of knowledge and you will find this knowledge builds upon itself quickly. Here are some ideas to begin your search. You want to know:
- Where properties are selling and what prices they are selling for
- The average number of days that properties in certain areas stay on the market
- The total number of homes that are for sale in each area
- Information on the local job market
- The rates of population growth and decline in certain areas
- Where schools and shopping centers are located
- The crime rates in the areas you are looking to invest in
- The percentage of properties that are occupied by owners and by renters
- Existing zoning laws and any restrictions on certain types of property
Once you have acquired knowledge in these areas you will have a tremendous advantage and you’ll be able to determine where you should focus your investment efforts and what types of property you should be looking to invest in. Naturally you will have insight into how much you can pay for a property as well. Students who become successful real estate investors take the time to learn their local market and are handsomely rewarded for their efforts. One would be wise to follow down the path of those who have previously succeeded and learning about your local market is a path that can quickly start paying dividends.