Market research

Market research

you’re going to learn how to evaluate rental income property by yourself. You’re not going to evaluate just a sample income property. You’re going to evaluate one in a market that you’re interested in and you’re going to look at the specific property that you want to look at as well.

We will be using the Zillow model, which is accessible in most countries.

The first thing you need to do is download the model. When you open it you will see the following screen:

go to the research tab first.

 

And what you’re going to see in front of you is what’s here on the screen right now. You’re going to see a lot of yellow cells on the screen. So when we’re looking at rental income properties, usually you’re not just going to be looking at one property.

You want to look at what other similar properties are being listed.

So one of the exercises we’re going to do is we’re going to find a group of properties that you may be interested in looking at in a particular neighborhood. And we’re going to get some information about them. Then next thing we’re going to do is we’re going to look at the same neighborhood, but we’re going to look at recent sales, similar properties that have sold in the last 90 or 180 days. 

 

And we’re going to look at what they were sold at as well as take some information about those properties. Then third, we’re going to look at the rents of income properties right now in the market properties that are being listed for rent.

So we’re going to get some rental comps as well.

What the exercise is for all these three is going to give us a sense of what the listings are being listed at, but what the units are homes in the area.

The rental properties are being sold recently.

So we’ll get to see what’s selling, where they are going to sell at a premium or some sort of a discount from the listed price.

 

That way you can get a better idea.

 

When we’re looking at a listing in this particular market, should you assume there’s going to be a premium that you’re going to have to pay, or should you assume that you might be able to get a discount? And lastly, the rental comps give you a better idea of how much you can ask for in terms of rent when you do purchase a property in that market.

One of the first things I want you to do is to open your browser.

I have a browser here and I want you to go to Zillow Dotcom. So open it up.

What’s going to happen is you’re going to see something like this.

So I want you to enter a market that you’re interested in.

I’m going to be looking at it near downtown Las Vegas.

And that’s where I’m going to be looking at here.

Specifically, there’s a certain block that I’m going to be looking at and I have it already set to here.

So once you kind of find a few block radius, the neighborhood that you’re interested in looking at, what I want you to do is click on the symbol here that says For sale and I want you to unclick everything else and only click for sale by an agent.

Because that way, we’re only looking at listings that are listed by real estate agents and we’re not going to confuse things with those that are listed by the owner or that are in other situations. Those that are listed by owners, sometimes depending on what market you’re in, could be, really, really high.

And most of them tend to be much higher than what is listed by agents.

Owners tend to be delusional about the values that their property is worth.

So we want to leave those out and we want to look at only the ones that are listed by the agent.

And then I want you to set some number of beds.

For this example, I only want to look at rental properties that are three bedrooms or more, And I only want to look at houses, but if you’re for your example, you may want to look at different ones.

 

The idea is you might want to try to keep it the same so that you can compare them on an equal basis. If you want to look at houses, just look at houses. You want to look at apartments or condos.

Look at condos.

OK, but right now, let’s say just click on houses first so that you can follow the exercise.

Now go to the market that you’re in, but you can click on the house.