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Chris Larsen explains why you should evaluate population growth and job growth before crunching financial numbers in real estate. Start with the qualitative factors that actually drive a market, then move to the quantitative analysis.
Chris Larsen explains why you should evaluate population growth and job growth before crunching financial numbers in real estate. Start with the qualitative factors that actually drive a market, then move to the quantitative analysis.
So for me, I think the best place to start is actually the qualitative before the quantitative. You can get lost in the numbers and kind of miss out on just the basic fundamentals. So starting with the fundamentals, which are more qualitative, would be things like population growth, job growth, the schools, the median household income, the new supply situation, the of supply and demand in the sub market. So getting a sense of all those things and understanding if this is a desirable location to begin with to invest, because you can make the numbers work anywhere for anything. So you have to be careful to make sure that you're actually fundamentally in a good place. And then from there, once that's been pre qualified, then actually start diving into the numbers, which at a high level, it's first getting revenue and expenses dialed in on a trailing basis, just to understand where the property is today.
