From the course: Rental Properties 101
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Understanding your target market
From the course: Rental Properties 101
Understanding your target market
- [Instructor] Understanding your target market is the first key factor. It's critical to do your homework and invest in the right markets. You may not always be able to invest locally in your own back yard, but there will always be a suitable market if you know how to look for it. Let me briefly mention three economic indicators to guide you in evaluating a potential market. GDP, or gross domestic product, is the total market value of all final goods and services produced in a particular area. GDP is one of the best indicators of an area's economic health and how recession-proof a market is likely to be. We're looking for state GDP growth of at least 2%, and more than 3% is outstanding. The next economic indicator is whether your target area is a metropolitan statistical area, or MSA. This is a region defined by the U.S. Office of Management and Budget with high population density and economic ties through local…
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