One of the first things you will want to know is the job market in a given metropolitan area. Is it a growing market? Is there long term job sustainability? Are there several large employers in the area? If everyone in town works at the copper mines and they close down, your property may quickly become worthless. What kinds of jobs are available? Are there growth limitations? This will usually drive up the price of properties. Is the workforce well educated? How affordable is housing. What is the tax structure like? High taxes can cut into your profits. What drives the economic market of that area? Is it going to continue? Knowing these things in advance can help you in choosing the right area for you to invest.
Once you know why you want to invest, you can start to look at different markets. If you focus is appreciation, you will want to find those areas that are expected to grow and appreciate. If you are looking for cash flow, you will need to find those areas or properties with the highest cash on cash returns. Either way it is important to know the market you are looking to buy in.
Quality of life Analysis
Many of those in the baby boomer generation are looking to relocate to areas where the quality of life is high. Many of the areas that qualify as quality of life will have smaller populations. They are usually centered around community living. The baby boomers will be the industry in some of those places. Many service businesses will be created around the needs of these retirees.
Along with a good climate, quality of life areas will have low crime and good adult education. Good health care and cultural amenities will be very important. These areas are usually abundant with recreation and natural beauty.
Rental Market Analysis
One of the most important aspects of choosing a market, is knowing who your renters are likely to be. Some of the best renters come from Military installations and colleges. Medical centers and tourist areas are also great places to have properties located. Large manufacturing plants can also supply a large number of renters. Be careful here though as many manufacturing jobs are going overseas.
