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The Geezer
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Category: General
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Experience:  Retired Civil Engineer, USC Professor & Realtor, financier
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How do you determine the need for rental property in a specific

Resolved Question:

How do you determine the need for rental property in a specific area.
Submitted: 8 years ago.
Category: General
Expert:  The Geezer replied 8 years ago.
This is a question that folks who consider buying apartment buildings always have to analyze and answer before making an offer on a specific property.

The single best indicator is an estimate of the vacancy rate. If you are considering apartments then you need to know the estimated apartment vacancy rate.

If you are considering detached single family houses (such as the housing market in 29 Palms, CA) then THAT'S the estimated vacancy rate you need.

How can you get those numbers? Local Realtor associations can provide estimates. Reliable, knowledgeable Realtors themselves can analyze them. When you review an apartment building that is listed for sale you can see the actual vacancy rate for that building. When you review "house for sale" ads you can make your own estimate based on how many there are compared to the total available housing stock.

Historical vacancy rates represent the past. If there are events coming in the future that would positively affect housing demand (new industry, for example) or negatively affect housing demand (layoffs, for example) you would want to modify historical data based on what you see coming in the future.

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