Once you decide to invest outside your local area, the possibilities are limitless. This can be exhilarating and overwhelming at the same time.

A tidal wave of thoughts may come flooding in immediately.  Should you consider a bustling city or a metro area?  You may reminisce about a vacation you enjoyed and the gorgeous buildings you saw there.

You could dive down every possible rabbit hole, cross-referencing “best real estate market” lists, trying to make sense of current population trends, and even looking up news local to areas you’d be interested in. Honestly, this won’t really help you draw any conclusions, plus you’ll waste a ton of time and energy.

Instead, begin by assessing your personal investing goals. Maybe you want to invest in a growing market that also provides decent cash flow. Using that basic framework, this research checklist will help narrow things down:

1) Job Growth

2) Population Growth

3) Job Diversity

4) Landlord/Tenant Laws

5) Taxes

6) Geographical Features

7) Cost of Living

8) Local News

9) Local Government

10) Whether You Have an Unfair Advantage

Job Growth

Since steady job growth is indicative of a healthy local economy that’s likely attractive to new businesses, developers, and residents to the area, this is the most important metric to evaluate in each market.

Job growth is a leading indicator of population growth. The more jobs, the more residents, the more likely the area will maintain a strong tenant base. When more people are attracted to an area, the demand for housing increases, which drives up rent and real estate prices.

Population Growth

Since the population in a certain area could be affected by natural disasters, migration patterns, and more, you always want to research it after job growth.

Finding an area with long-term upward population growth trends (not a temporary bump) is key, and a major factor supporting that trend is job growth in the area.

These two metrics provide a full picture of the health and future of a given market.

Job Diversity

You want to find an area with a variety of industries supporting the local economy. Strong job growth is much less enticing if you discover that most of the jobs in the area are, say, in the tourism industry.

A recession or a negative news story could largely impact the number of tourists, and therefore the job growth and the population trend. A diversified job market is much more attractive since a hiccup in any single industry likely wouldn’t affect the area as a whole.

Landlord/Tenant Laws

Beyond the top 3 factors – Job Growth, Population Growth, and Job Diversity, the next best factor to learn about has to do with the laws governing rental properties.

Rent control, for example, is great for tenants but makes it incredibly challenging for landlords to make a return on an investment in an area where costs for contractors, pest control, and property management are skyrocketing.

As an investor, you want some insight from local property managers who are intimately familiar with these laws, so you can find landlord-friendly areas.

Taxes

While usually the last thing on investors’ minds, taxes can make a huge difference on the bottom line.

State income taxes and property taxes will both impact your operating budget thus, your overall return. Each state has a different tax structure and it’s good to understand what you’d potentially be getting into so you won’t be surprised later.

Geographic Features

Use Google Maps to check out the actual, physical landscape of the area. Look for physical barriers like a body of water, a mountain range, or any other geographical features that could inhibit the physical development of the area.

As an example, coastal cities are limited by the ocean. Development can only get so close to the water, which forces them to build upward or expand into the suburbs. This drives up the value of centralized real estate, especially in a time of job and population growth.

Cost of Living

By seeking out an area where the cost of living is low, especially in comparison to the median income in the area, you’re more likely to experience growth. If people can afford to live in the area easily, there is room for the cost of living (i.e., rent) to rise as more jobs and people move into the area.

Local News

While the other, previously listed factors are much more important, once you’re pretty “sold” on a certain area, you may want to track a few local news stories.

It would be great to have some heads-up about new companies moving to (or away from) the area, local announcements, community developments, and anything else that would allow a sense of understanding of the local economy and potential future of that market.

Local Government

Just as with the local news, the local government is indicative of the area’s future standings. It’s a good idea to invest in areas with strong local leaders who support new initiatives, an expanding local economy, and whose vision includes making the market vibrant and welcoming.

Strong leadership from the local government is attractive to corporations, which means that job growth will continue.

Whether You Have an Unfair Advantage

There’s always the chance that you have greater insight into a certain area, more so than other investors. Maybe you have a close cousin or best friend who lives there, maybe you went to college there, or you grew up there.

Any time you possess an unfair advantage, more weight should be given to that market. Local connections or a little history with a particular area can put you leaps and bounds ahead of other investors.

What About Investing Passively In a Real Estate Syndication?

As a passive investor, you’ll focus on finding a strong sponsor first. Once they let you know about potential deals, you can use these 10 factors, in combination with your personal criteria and goals, to conduct your own thorough research while avoiding overwhelm.