“Location, Location, Location” Blah,...

Tired of hearing that? Me too. But the reason you hear it so much is that it is so true. Real estate markets are very localized. When you hear that the market across the United States overall is stable, it means nothing.

Some markets could be skyrocketing up. Some might be crashing and burning.

That’s why it’s so important to know your market. Depending on where you are in the market, you will want to adjust your real estate investing style:

Buy in a market that is rising
Pay off debt to maintain cash flow in a declining market where you have rental property
Sell in a market that is peaking, before everyone else catches on

These are just some of the strategies investors use to survive and thrive in different markets. The key to doing well is to know what kind of market you are in.

Data: Not Just Another Star Trek Character

Data can be very helpful to find out what kind of market your area is experiencing. You want two main factors to make your market a good one:

People moving into it
Salaries going up

Mo’ people and mo’ money means mo’ demand for what you’s got.

There are a bunch of factors that contribute to people moving into a neighborhood – especially reasonably affluent people. Some examples of desirability are:

Low crime
Good schools
Attractions
Proximity to major cities
Ease of commute
More jobs

Basically anything that will make people’s lives easier and more fun.

Does your town have these factors? Or a town you are interested in for investing? One way you can find out is to look at the data for that town. But where is that data?

One-Stop Shopping

You can go to your city or county offices to find the data.

Or you could try to Google it, finding pieces of data here and there.

Or you could just go to the City-Data website and find the data all in one website.

City-Data packs a ton of useful information into their website that you can use for real estate investing. They cover the entire United States, too. If you are looking around for a new investing area, you can quickly see if an area looks ripe.

When you go to the website, you will notice a menu bar with quite a few selections. Let me give you a tour of what each selection can provide.

Forums

What could be better than to ask people who live in a particular area how they like it? Posting questions in a Forum and letting the answers roll in sure beats door knocking. The forums are divided into forums by state, then sub-divided into forums by city.

Cities can be awfully big. But you can ask people questions like:

What companies are moving into the area?
Where are the jobs?
Where does everyone want to live?
What are the best commuting towns?

Maybe just look like you are interested in moving to the place… after all, those are the questions retail buyers will be asking. Even if you are selling or wholesaling to investors, they will be selling to retail buyers.

Cities

Selecting Cities on the main menus will bring you to a dropdown that lists all the states. Click the state that interests you. A list of cities and a map comes up:

To find out information on each city, you can either click on the city name or the marker on the map. The map also has counties drawn out. If you click on the county, City-Data will also display county information.

When you click on the city, you will see some useful investing information:

Population and change from the last census (2000)
Median household income and change from the last census
Average sale price of homes in the area
Average rent for the area

Admittedly some of the cities are very large. You might want to drill down further into an area.

Neighborhoods

The above screenshot is what you see when you select ‘Neighborhoods’ in the main menu. Select a state and start drilling down into a particular neighborhood.

As you can read in the graphic, there is a wealth of information for the real estate investor. Not only can you use this to determine if neighborhood X is a good area, but you can use the data in ads for selling or wholesaling property.

Schools

Quality of schools is very important to retail buyers and their families. City-Data helps by ranking the schools in a particular area compared to the rest of the country. Chances are the better the school, the better the demand for housing.

Clicking on the ‘Schools’ menu selection leads to a list of all the states. By clicking on the state of interest, you will have a selection of schools in alphabetical order.

Once you have found the school near a potential investment area, you can see the enrollment demographics going back pretty substantially (early 1990s). By looking at trends such as enrollment, test scores and ‘free lunches’ (subsidized), you can see if an area is growing or declining, and possibly how affluent the parents are.

Restaurants

This is a list of restaurant inspection findings and violations by state. Not sure how this would impact investors…

Maybe it’s a list of places to avoid when you are taking a potential private lender out for dinner?

Assessments

This selection takes you to the public records information for a particular county, if they have the data online and accessible.

The final catch-all selection does have other useful information.

Some of the information that would be helpful to an investor includes:

Crime and Sex offender information. You don’t want potential buyers going ‘Eek’ when they find this out on their own.
Building permits filed gives a great idea of a town picking up and appreciating. Many big builders have teams of people doing research on an area.
Work and jobs – will also give good information about an area’s growth.
U.S. Cemeteries – Ever try to sell a house next to a cemetery? Not the most attractive feature. Forget ‘Eek’ – now you have buyers going ‘Creeeeepy.’

Overall, City-Data can give you a wealth of information to make sure you are investing in the right area. Give it a go.

Give Us a Shout

Have you used this site? Tell us about it in the comments section below.

Do Due Diligence – The best investors know their market areas like the back of their hand. Going in blind is really rolling the dice.

Confirm Information – City-Data is only as good as the data fed to it. Try to confirm important information from more then one source. Often the best way is to walk around and talk to people.

Use Information to Negotiate – If you see some negative information in City-Data, use it convince the seller to lower their price or give you better terms. Advertise the good data to potential buyers so they are willing to pay more.