Why It's NOT All About "LOCATION, LOCATION, LOCATION"! | Episode 125

Real estate is all about location, location, location… or is it?  Here’s how you determine EXACTLY which market is best for your portfolio dollars… along with the one thing that might matter even more than location.  I’m Bryan Ellis.  This is Episode #125.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you.

What is the very best market in America for real estate investing?  What about the top 5?

I’ll get to that in just a moment, but first:

Later today, I’ll be sending out an update to my TOP PICKS list with some great new rental properties that can be purchased FAR below retail price… seriously excellent deals, to be frank.

So if you’re looking for an actual GREAT real estate deal, in a very desirable market, that you can acquire for a very attractive price – then be SURE to be on my Top Picks notification list.  To get on that list, text the word TOP PICKS with no spaces to 33444.  Again, text the word TOP PICKS with no spaces to 33444 and later today, I’ll send out the notice to you!

So… which real estate markets are absolutely the best?

More importantly, how does one accurately determine this information?

The best approach, of course, is a crystal ball.  That’s what I use, and it’s served me very well.  Hehehehehe

Just kidding, of course!  I could practically hear all of my more woo-woo listeners in California going gaga in the realization that I’m one of them.   Hehehehehe

But actually, I’m not.  I’m more of a hard numbers, analyze a spreadsheet, black-and-white standards sort of guy.  Not as exciting as the hocus pocus, but it works a lot better!

So, short of invoking the supernatural, how do we know where real estate is likely to boom or bust?

Incidentally, what I’m about to tell you is relevant for stocks, too.

There are 2 general approaches to analyzing markets… regardless of what the market is.  One is called “Fundamental Analysis” and one is called “Technical Analysis”.

You should have conceptual familiarity with both.  So I’ll give that to you right now.

Here’s the gist of fundamental analysis:  There are some factors that tend to have an impact on asset pricing.  The most fundamental of fundamental factors is supply and demand.  Recently, there’s been a relative shortage of housing inventory in cities like Charlotte, San Antonio and San Diego.  And since people continue to want to move into those areas, prices are naturally driven higher.

So, the SUPPLY of housing inventory in a market is a very, very important consideration, and it’s fairly easy to know.  The U.S. Census Bureau freely offers this data, and you can get this information from the National Association of Realtors as well.

But what about the other side of the coin:  Demand?  Assuming a market isn’t oversaturated with housing, how can you know whether there will be demand for real estate there?

Here again, adherents to the discipline of fundamental analysis believe that logically connected factors drive demand, and therefore pricing, of real estate markets.  Some of the most commonly relied upon fundamental factors are:

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