Since the turn of the century the U.S. population has grown almost ten percentage points. That's a lot of heads in beds! Recognizing a full one third of the population rents, how do we find these new customers for multifamily property owners? Where are all these new people? Let's find some clues in pattern recognition.
Big, Easy Patterns
#1. Census Data
The volume of information provided by United States Census Bureau can easily create that dear-in-the-headlights feeling. Start with the home page and go to American Community Survey.
Go to: http://www.census.gov/acs/www/. This will provide "snapshot" data on any community without having to dive into the entire website. The Survey provides a starting point for obtaining demographic data for a certain place.
#2. Traffic Patterns
The State DOT (Department of Transportation) can tell you where the traffic is... car traffic.
Let's say we were to review the population data for New Orleans today, pre and post Katrina. The data will likely reflect some differentials (particularly at the census block group level). My guess is auto traffic has dropped off a cliff. Why is this important? Because tracing traffic volume and traffic patterns allows us to draw some conclusions and make predictions about future occurrences of growth based on this information.
#3. Building Permits
City/County Planning & Zoning. P&Z knows where builders are going to build.... even before builders do. They track not only all the paper related to building, but also utilities construction.
#4. Chamber of Commerce
The local Chamber has their hand on the pulse of the business community. It is there job to promote the community to the outside world. They know where development is occurring and who is shipping jobs into and out of the community.
#5. FBI Statistics
While this information can be daunting, it is important. It's also public information. For an area, focus on patterns of crime against people and property. What is the direction of the trend? New York City in the 1980's had terrible crime. Yes, there is still crime there today, but not nearly to the extent as years ago. This single fact has enhanced not only the standard of living in the city, but has had a positive impact on property values.
Scratching the Surface
The preceding is a beginners birds-eye view to a place. The financial data alone is a single slice of the picture representing the value of an asset. The greater determinant of real value is in understanding current and future utilization... and by whom. The "whom" is identified by Demographic and Market Analysis!
About This Blog
Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. We discuss best practices in multifamily management and methods related to how to buy apartment complexes. Our focus is sharing strategies and tactics that can be implemented and measured. For more information, visit: www.MultifamilyInsight.net