Market Analysis is one of the most vital pre-conditions to effective decision making in the realm of real estate investment.
Conducting a Real Estate Market Analysis(RMA) helps in evaluating the real value of the property while assessing its financial feasibility. However, due to the lack of adequate exposure to its underlying benefits, a good chunk of investors choose to ignore it to their own detriment. Today, we shall have a look at some of the key reasons why both the buyers and the agents must give due weightage to the importance of market analysis in the real estate sector.
What does Market Analysis Entail?
The significance of conducting an RMA can be amply gauged by the factors that constitute the analysis. Market analysis gives the investors a detailed insight into all the relevant factors Following are some of the key considerations that form the pith and substance of RMA.
Physical Factors
The first prong of the analysis concerns defining the size of the target area that would throw open a profitable source of income. This helps the investors in assessing the demand and supply chain in the area and gauge the competition. Furthermore, this aspect of analysis includes the study of several physical factors such as the location of the site, the climate, availability of water and the patterns of transportation. These factors do have a huge impact on the determination of the financial feasibility of the property.
Location: Location is perhaps the most important factor that impacts the price and profitability of the property. In the cases of rental property, the location assumes a much greater significance. It is thus quite important not to keep aloof of any of the aspects of location factor.
Property Features: The size of the property, the size of the rooms, availability of recreational facilities, etc. are some of the other relevant features that an RMA essentially outlines. The analysis lets you know about the possibility of return on investment.
Economic Factors
The economic factors are an equally important set of parameters that have a considerable impact on the financial feasibility of the property. Factors like availability of a robust transport network, access, and quality of public utility services like malls, theatres, parks, and other commercial complexes do have a great impact on the valuation as well as the demand of the property. The RMA lets the investors know about the existing demand for the kind of real estate property in the area.
As you, must have observed, a detailed Real Estate Marketing Analysis is a sine qua non to an informed investment. It helps both the buyers and the agents to have a fair assessment of all the necessary factors in order to determine the true value of the property. Ignoring the importance of RMA could open the Pandora box of issues related to the Sisyphean nature of the property. In case, you are looking forward to making an investment in the real estate sector, do make sure that you get a comprehensive RMA done.