How can real estate investors hack the best investments using restaurant data?
No matter what type of real estate investors are interested in, local restaurant information can provide great insight into where to find the best deals, the strength of the local market, and how best to market rentals.
There are many tools for evaluating real estate markets. There are many different factors, fundamentals and sources of information. Often they can be confusing, complex to interpret, and even misleading. Yet, failing to complete due diligence and discover the real deal can be financially catastrophic. Those that want to hack the data fast so that they can make smart offers quickly, and ahead of the competition, can achieve more than most think simply by looking at what’s going on with local restaurants.
How Busy are Local Eateries?
Are local restaurants, fast food joints, and coffee shops packed, or are they dead? Are there long lines? Reservations booked for weeks or months in advance? Or is it a ghost town? Restaurants are normally the last to be hit hard in a recession, and the first to rebound when times to get good again. Even in tighter times, restaurants are one of the ways people still treat themselves, significant others, and kids. If local eateries are doing well, it’s a good sign.
Which Areas are the Busiest?
Which parts of town have the busiest restaurants and eateries? Which are supporting the launch of new restaurants, versus where there are a number of closed down and abandoned restaurants that may have been on the market for a while? This will say a lot about the hip and growing areas for homes and condos, versus those that are more distressed and which are dying off.
Which Types of Restaurants are the Busiest?
Is it the low end eateries, food truck, fast food, or super high end fine dining? This can reveal a lot about who lives there and is visiting, as well as how confident they are about their finances. There could be a ton of coffee shops buzzing with entrepreneurs and startup activity, exclusive new juice bars and cocktail lounges, or cheap buffets. What price points are diners trending towards? What does that suggest about the best price range of real estate to focus on? What types of homes are then most likely to sell quickly and attract the most competition?
What’s on the Menu?
What types of food are available? Is it organic tea, free range chicken, grass fed beef, gluten free options, and locally grown farm to table ingredients? This provides great insight into which types of real estate will sell the best, how trendy the area is, and the type of branding and marketing that real estate clients expect. Do they gravitate towards brands and properties with overly transparent marketing and branding? Do they place a premium on green homes, sustainability, and healthy spaces? How tech savvy are they? Will your properties and the way you present them create competition and attract multiple bids?
Chefs and Restaurant Ratings
Does the area attract notable chefs and celebrity chef restaurants? Are restaurants recipients of notable ratings and rankings? These can mark destinations that will make many top 10 lists in many news, travel, and eating guides. That can mean a lot of exposure for your properties. It’s free press. Don’t assume that these places are only in the most rich and glitzy destinations either. Even at the bottom of the market, Detroit began attracting top chefs who wanted to return home and revive the city with locally sourced ingredients and trendy eats.
How Many Restaurants are Available for Sale?
How many restaurants are available on the market? This can reveal local demand for real estate, or the lack of it. What cap rates are available? What does this say about local real estate investment returns, and the soundness of the property market over the long run?
Summary
Restaurant data can be a great tool for real estate investors to gain deep insights about the local real estate market. It’s a fast hack to peek behind the headlines to find out what is really going on. It can be done online, or even by touring local restaurants. It can be a lot of fun, relaxing, and an opportunity to network or multitask by combining it with some good quality time with those you love.
