Objective
Now that we have isolated a specific zip code, we can begin researching the specific location in order to begin formulating an investment thesis for the specific zip code. We are looking for key value drivers, such as:
- Local government budget (the area we can focus on is Marietta, GA)
- Job growth
- Household income
- Types of occupations
- Tax rates
Economics
To find some additional information, I went to Bestplaces.net to acquire additional job and demographic information. While some of the earlier sources we utilized also have similar information, I wanted to present another website with some additional job growth forecast information as well. On the website, we can type in the zip code circled here:
Typing in the zip code “30067” takes us to the following website, with a summary of Marietta, GA. We can select the “Economics” link on the left to take us to the local economics summary.
Using the data, I first note the future job growth of 36.0% versus 36.1% for the US economy. In general, Marietta seems to be reflective of the median (or slightly less) of the general economy. In order to drill down on an investment thesis, we need to look at some of the information pertaining to the individuals that currently live there. First, we compared the general income ranges for the Marietta population versus the US population:
As we can see, Marietta’s population is more allocated to income earners below $50,000 per year. This is seen as a positive since we are looking for potential renters rather than buyers. We will research how to find attractive properties for these specific populations in the relevant zip codes at a later date. Now, lets focus on getting a more complete picture. I reviewed the types of occupations in the zip code and highlighted the top 3:
About half of the population focuses in these three areas. Later on, I will look for information related to where these individuals work, travel time to work, and whether there are more jobs opening in these areas.
Now, in order to look for more information about potential home price appreciation, I like to review Zillow home prices & values information to get an idea of how the market is looking at the zip code. Thankfully, it looks like our screening has come through based on Zillow’s predictions. While I would not consider research done at this point, the following from Zillow validates a lot of our work so far:
One thing that immediately concerns me, however, is that prices have increased about 8.3% over the last year. I may have missed the opportunity to invest or find a good deal. However, the market seems to have an upward trajectory for the time being.
Summary
We have found some additional facts to consider for our due diligence, and our nearing the process of actually focusing on finding specific deals. For the next lesson or two, we will focus on the local government and finding any indicators we can to hang our hat on. A lot of the websites out there report general information, we are looking to validate market trends. These next steps will require a bit more rigor as the processes cannot be automated like before.
