How to Find the Best Real Estate Markets to Invest In

Each investment in single-family rentals begins with choosing the right market. However, navigating real estate markets can be challenging due to their complexity, limited access to reliable data, and numerous factors to consider. Fortunately, HouseCanary’s platform makes it easier for investors to identify and compare markets effectively.

This guide offers a step-by-step process for identifying, evaluating, and comparing optimal markets for your next rental property investment using HouseCanary’s advanced data analytics tools.

Step 1: Identifying New Markets for Investment

Defining your rental investment strategy is the first step. Consider the type of property you want, the yield you’re targeting, and your expectations for appreciation. Once your strategy is clear, you can begin exploring markets that align with your goals.

The Core Challenge: Limited Data Access

One of the primary obstacles for investors is accessing reliable and comprehensive data. Many rely on piecing together information from public records, MLS data, or other disjointed sources, often leading to incomplete insights and missed opportunities.

The Solution: Instant Market Research

With CanaryAI, you can bypass these hurdles. By asking straightforward questions, you can gain immediate, actionable insights, such as:

• “How is the investment market in Phoenix, AZ?”
• “How does Dallas compare to Phoenix for investments?”
• “Which ZIP code in Phoenix offers higher rental yields: 85006 or 85008?”

This approach provides a quick overview of potential markets, enabling smarter, data-driven decisions.

Step 2: Evaluating Market Conditions for Investment Properties

After narrowing your options, dive deeper into each market’s conditions. Key factors to analyze include supply and demand, median home prices, rental yields, and economic indicators like job growth.

The Challenge: Key Metrics to Watch

• Supply and demand: Check inventory levels, new listings, and absorption rates.
• Median home prices: Monitor trends over time for insights into appreciation potential.
• Rental yields: Look for high-yield markets if cash flow is your priority.

The Solution: Market Insights for Advanced Analysis

HouseCanary’s Market Insights offers detailed ZIP-level data across more than 14,000 ZIP codes and 200 MSAs. It provides approximately 100 metrics to guide your decisions:

• Track price trends for new, active, and closed listings.
• Assess market balance with data on inventory turnover.
• Evaluate rental trends, including vacancy and pricing patterns.

For example, using Market Insights, you can compare Phoenix ZIP codes like 85006 and 85008 to determine which offers better long-term investment potential.

Read more in the full article.