If you’re under the age of about 8, nothing is as exciting as imagining that moment when Santa’s boots hit the ground at your house!
Turns out, boots on the ground is a gift for real estate investors too. This week is a time of lower productivity for many business people, so what’s a highly motivated real estate investor to do? Market research—old school!
A little over 5 years ago, we purchased our first investment property. At that time, the neighbourhood was humming. It was creating “buzz” in real estate circles, and even the media. A simple drive down many of the streets showed new infills, secondary suites, and renovations or improvements to many houses. Signs of gentrification were everywhere. The property still performs great! But what about our next acquisition? Should we choose another one in that neighbourhood?
So off I went, with my “I buy houses” flyer, to deliver door to door. Hmmm. I found one construction crew. There were a lot of people home during the day (not just kids and seniors). Some cars clearly hadn’t moved since the last snowfall (2 weeks ago?). Maybe I picked the wrong street? So I drove a few blocks, parked, and tried again. Nope, it’s the same. The entire neighbourhood FEELS different. Even the main shopping district in that neighbourhood has projects that have stalled.
Luckily, Mother Nature has been kind this week. It’s beautiful, sunny and relatively warm (anything above zero counts as warm in December!). So off I went to another neighbourhood. Even 3 years ago, I was passing over this area. Nothing much happening here. But out of my car I get, and walk door to door with my flyer and a little Christmas sweet treat. Pride of ownership is everywhere—I mean literally almost every house. There are seniors and munchkins around, but only a few working age people. I easily walk by 3 or 4 houses in various states of construction, and there are a few infills. Cars are mid-range in this neighbourhood. People are keeping up with home maintenance issues. As I approach one door, an older gentleman opens the door: “Are you a porch pirate?” Nope, but I have a Christmas treat here if you’d like it? Haha. So now we’re best friends—that was easy. We chat and he tells me all about the changes in his community. He basically confirms everything I can see as I walk around. Even my favourite “big player” (a company that owns many multi-family buildings around Calgary) is in this neighbourhood. I love to see that! I know their research team is very strategic.
Market research is about economics and politics, tenant profiles and stats—but those ideas are difficult to quantify at the neighbourhood level. When it comes down to choosing single family properties, nothing beats talking to the locals, and walking the area. I’m not advocating anything creepy; simply walking your dog will work. Or bringing a friend and a cup of hot chocolate to walkabout.
Nothing beats the anticipation of Santa’s boots on the ground at this time of year! But for real estate investors, nothing beats a little time spent with our own boots on the ground as part of our market research.
Wishing everyone a fabulous holiday season, and safe travels!
