Have you ever wondered how some real estate investors unfailingly identify the next hot real estate market or sub-market? Have you found that many of these experts keep this a closely guarded secret?

It really isn’t that hard to do your own due diligence when buying real estate. We’ve provided a list to get you started. Please add your own criteria, based on your specific needs. For example, we will not consider a real estate market unless we are willing to visit the area,  and visit often. That’s just a personal rule. You can add your own as you go.

People invest in real estate for the strangest reasons. They take the information a realtor gives them as fact. They buy into their own wishful thinking — often convincing themselves a real estate market is great when it may in fact be on the brink of disaster. They fall in love with a property and fail to see it as a very important investment, one they may have for years and years.

Simply put, many people fail to take the time to do some homework when buying or investing in real estate.

If you are considering relocating to a new area and/or purchasing real estate in a new area, the following criteria can be highly effective in locating hot real estate markets. This list will assist you in doing some homework before investing your time or money in a personal visit to a real estate market, which should always be your next step.

The top real estate markets should have:


  1. Solid job growth and employment outlook – companies are hiring.
  2. Growing employment base and jobs – improving economy.
  3. Good population growth and density.
  4. Strong rental demand.
  5. High average market rents OR, rental rates on upward move (at low point).
  6. Increasing leasing activity without tenant concessions.
  7. Room for growth; second or third-tier city (population – million or less).
  8. Mild climate; located in Sunbelt.
  9. High rating in national quality of life surveys — growing in popularity.
  10. Median price of homes at 3-4 times median household income.
  11. Income properties selling for 10 times annual rent or less.
  12. Average vacancy rate of 7% or less.
  13. Low crime rates.
  14. Solvent financing in cities.
  15. Lower tax rates than national average.
  16. Location in the county seat.
  17. Cultural activities, universities, and diverse economies.
  18. Well established, long histories.
  19. Low housing inventory.
  20. Low housing foreclosure numbers.

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Theresa Bradley-Banta writes about investing in real estate while avoiding the pitfalls that plague many new investors. She is a 2017 PropTech Top 100 Influencer and winner of 14 American and International real estate awards for her website and real estate investing programs. As featured on: The Equifax Finance Blog, AOL’s Daily Finance, Scotsman Guide, The Best Real Estate Investing Advice Ever Show, Stevie Awards Blog, Rental Housing Journal, and Investors Beat among others.