What You Need To Know About Real Estate Market Analysis
Before a real estate investor purchases a property, they should perform a detailed market analysis to determine the feasibility of the potential investment. It’s an area that is often underestimated, but it remains one of the most important steps for thoroughly evaluating any potential investment.
Having a thorough and detailed real estate market analysis report will prove to be invaluable when it comes time to decide on closing on a deal or not.
Any proper market analysis performed should review key factors such as the target market, current neighborhood and its potential for appreciation, current demand, environmental factors and much more. A South Florida real estate lawyer can provide you with up-to-date information on many of these factors.
Evaluating the surrounding neighborhood is always essential in a market analysis. This can offer insight into market buying patterns, the price of comparable homes or commercial buildings sold in the area, public utility access, developmental patterns, and other considerations that will affect future property values. Statistics regarding property values over the past few years will indicate where the neighborhood is heading in the future. Neighborhood crime statistics are also readily available and should be reviewed.
Economic trends are always important to consider with any detailed market analysis including business conditions, employment rates, and anticipated future growth. Both national and local economic factors should be evaluated, as both will have an impact on the local neighborhood. Population growth along with positive economic signs like high employment rates signify that future demand will be high, naturally driving prices upward.
The analysis should include environmental factors that affect the immediate area such as climate, flooding and weather events. Although hurricanes have become a new concern, most modern buildings are constructed with hurricane-proofing features. Flood zones be researched for any potential development or purchase.
Traffic statistics are particularly important for commercial real estate investments – for example, an upscale boutique will need a very specific location with a high level of foot traffic from potential shoppers. Residential real estate investors will want to consider how traffic and noise could negatively affect their potential location.
With a real estate market analysis, it is better to be more detailed and thorough rather than cutting it short. The cost and time may seem like another obstacle; however, it is well worth it, as you may uncover some surprising facts about the neighborhood, environmental issues or other concerns that could affect your decision.
To get assistance with a real estate market analysis in any part of South Florida, contact Mark Schecter, a leading South Florida real estate lawyer for a consultation at (954) 779-7009.