This time, I talk about the importance of market research and due diligence when entering a new market location. I’ll share six vital numbers that investors should know, including local area square foot rates, competitor occupancy levels, operating costs, build-out costs, market capital costs, and cap rates. I also provide methods for gathering this information, such as online searches, talking to agents, reviewing competition, checking out developments, and networking.
KEY TAKEAWAYS
- It is important to gather information about the local area, including the square foot rate or desk rate, competitor occupancy levels, operating cost per square foot, build-out costs, market capital costs, and cap rates or yields investors are seeking.
- Methods to gather this information include online research, talking to agents, reviewing competition, checking out developments in the area, looking at the requirement list, placing ads, and networking.
- It is crucial to physically visit the area and observe what is happening on the ground and where investments are going.
- Negative or positive findings about an area should not immediately rule it out, as problems may lead to better opportunities.
- Ultimately, it is up to the individual to gather and analyse the information to make informed decisions about investing in a new market location.
BEST MOMENTS
“What are the steps to ascertaining market demand in a new market location that you haven’t owned anything in before?”
“Nothing beats getting in the car or on your bike if you’re that way inclined, and taking a look about on the streets. Only then do you see what sidenof the tracks are better and where the investments are going.”
“If an area is up and coming, there are developments going on, but maybe not too much, then you know those are some big ticks ✅ in the boxes.”
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