Written by Ben Miller, CEO & Co-Founder, Fundrise.
One of the great features about investing in real estate through a crowdfunding platform is the ability to access diverse deals around the country with only a few clicks of a mouse. The advent of real estate crowdfunding marks the beginning of a new phenomenon, where thousands of individual investors will have a need to research real estate markets they may not be familiar with. As all savvy investors know, understanding a market is one of the most important steps to making a smart, informed investment decision.
Luckily, there are several resources available online to evaluate specific markets or neighborhoods—that don’t require a cross-country trip.
1. Online maps
Beyond a convenient resource for directions, Google Maps is a great way to research a neighborhood. If you are interested in a multi-family asset in an urban area, for example, you can map distances to key landmarks, view public transportation options, and see if there are grocery stores, restaurants, or other features that would appeal to tenants. Google’s Street View feature is particularly useful for getting to know an area.
2. Walk Score
Walk Score has a vast amount of information on every neighborhood in the country. Specific areas or real estate markets are ranked by their walkability and public transportation. Also listed are average apartment rental rates, housing prices, and other features like crime rates and notable nearby sites.
3. Online sales-listing sites
Sites like LoopNet, Redfin, Trulia, and Zillow are helpful for understanding current activity in an area. You’ll be able to see which similar nearby properties have recently been sold—and at what prices.
4. Market reports
Market reports are a great resource for learning about the larger real estate market trends in a city. Most of the major commercial real estate brokerage firms, such as CBRE, Marcus & Millichap, and Newmark Grubb Knight Frank, offer free reports that break down key findings for most primary and secondary real estate markets. Additionally, the Urban Land Institute, the industry’s leading research organization, offers a number of resources related to the economy, infrastructure and transit, climate and energy, and planning and design.
5. Real estate news
GlobeSt, city-specific Business Journals, and Bisnow are three of the country’s leading real estate news sites and can be useful resources for learning about the major real estate trends and players in a city.
6. Research real estate markets by phone
Identify a handful of new projects in the immediate vicinity of the property you are evaluating. Call as a prospective tenant to find out rents. If you have friends or family in the community, call them to ask about the neighborhood and pricing.
Before making a real estate investment, it is imperative to ensure that you are working with a credible platform that thoroughly vets, underwrites, and stress tests each deal before it becomes available to you for investment. Here are some of the key questions to ask when evaluating a real estate crowdfunding company. Learn about Fundrise’s innovative approach to online real estate investment.
Interested in learning more? Check out McKissock’s Crowdfunding in Real Estate course for more info on how real estate crowdfunding works, investing via crowdfunding, and raising capital.