The Market Selection Checklist

How to judge a market before you judge a listing. These are close to the same signals Prop Hound checks for you automatically once you set up a market to watch, laid out here so you know what they actually mean. Don't know which market to even start with? Try our free Market Picker: https://prophound.co/market-picker. Two quick questions, real data across our top cash-flow markets side by side, no card or email required.

• Checked population growth for the area over the last several years. A shrinking population usually means shrinking long-term rental demand. Prop Hound checks this automatically for every market you watch. To check it yourself: https://www.census.gov/quickfacts
• Checked the local unemployment rate. Above 6% is worth understanding before counting on steady rent. Prop Hound checks this automatically for every market you watch. To check it yourself: https://www.bls.gov/lau/
• Checked flood zone risk for the area, not just for one listing. A high-risk area means added insurance cost on almost anything you buy there. Prop Hound checks this automatically for every listing (when the lookup succeeds, FEMA's own service is occasionally unreliable). To check it yourself: https://msc.fema.gov/portal/search
• Worked out the market's typical rent-to-price ratio, not just one listing's. Under 0.7% is a stretch almost everywhere, 1%+ (the "1% rule") is strong in most markets. Prop Hound calculates this automatically for every listing it screens. To check a market's typical ratio yourself, compare several active listings' prices against real rent comps on Zillow or Rentometer: https://www.rentometer.com
• Checked the property tax rate for the specific county, not just the state. This varies a lot even within one state. Look this up directly on the county assessor's website, not the listing.
• Checked whether this city or HOA restricts rentals: a required rental license, a cap on non-owner-occupied units, or an HOA rule requiring board approval. A property can be legal to buy and illegal to rent out.
• Checked how fast rentals lease up in the area. A tight rental market means less vacancy risk between tenants. Check active rental listing counts and days-on-market on Zumper or Zillow Rentals: https://www.zumper.com
• Checked crime trend and school ratings for the area, not just the headline numbers. Both affect tenant quality and long-term resale value.
• Checked landlord-tenant law for the state: https://prophound.co/checklists/tenant-vs-landlord-states
• Got a real insurance cost estimate for the area, not a national average, and confirmed carriers are actually still writing policies there. Some insurers have pulled out of high flood/wildfire/hurricane markets entirely, cost isn't the only risk.

Longer read: Median prices and rents in ten cash flow markets.