Who wants to be average? Not you.
Demographics research can live and breathe in the averages for years encapsulating data-rich reams of information in the recesses of difference between mean, median and mode. Who cares. Great dinner conversation but seldom actionable when real dollars are in play.
Quality, actionable information is almost always worth its weight in gold. The same is true when it comes to acquiring demographics information as an input for purchase decisions. A quality property is represented, in part, by the physical asset and in part by the people who live in and around the asset.
When performing due diligence for multifamily acquisitions the end result of demographic research has to deliver actionable information. And averages only go so far. Whereas demographics are an absolute necessity in determining market viability, we need specifics to trend.
Think of demographics data the same way you think about property level market rents. Generic market rents are useless until tied to comparative assets. You need to know, specifically, Gross Potential Rents (GPR) and actual rents with concessions within the submarket AND for directly competitive properties.
The same type of thinking is required for demographic data such as household income, age distribution and family size. A submarket full of young professionals has a completely different service profile than young families. You need actual population counts and information tied to that particular population and not averages.
Gaining these specifics will often require dollars to obtain as there are limited freebies when it comes to obtaining real-time demographic information. Although there is a cost it is nominal in exchange for the knowledge gained.
There are always pay-for-services options available:
For free resources- start with local government offices, such as:
Planning & Zoning
Chamber of commerce
Local College Extension offices
Utilize these resources as a springboard into deeper research. This will help you to having an expert understanding of your markets, competitive forces and assets.
This article is intended to be informational only and does not provide legal, financial or accounting advice. See http://multifamilyinsight.com. Multifamily Insight.