Do you think you’ve identified a hot new area to build your next rental? Or maybe you haven’t exactly found the perfect spot but don’t know how to determine if there are any demographic shifts that could indicate a rising demand for rental housing? One way to identify building trends is to followdemographic trends building permits.

Building permits are recorded and released every month for every major metropolitan area in the country. As well, even the smallest of communities keep track of the number of permits issued. What exactly is a builder’s permit?

Builders permits are legal authorizations from the city or county government to an individual builder to start excavating a lot in preparation for a build. An increase in building permits indicates an increased, sustained demand for housing. Individual builders and developers alike track existing home sales and other demographics before finally deciding to start a new project. This means by the time a building permit is issued there have been identifiable trends indicating an increase in demand and therefore an increase in housing prices. For the real estate investor, it means greater demand for rental properties as well.

National building permit information is broken down by region. The West, South, Midwest and Northeast regions all report their data and logged by the Census Bureau. Local building permits are released as a matter of public record. If you want to spot a trend, follow the building permits then consider building in that same area or in the area the permits are moving toward.

You don’t need to be an expert demographer or civil engineer with the experience to spot moving patterns but you do have access to the information previously culled by others. There’s no need to do your own extensive research, just wait for the results of the professionals. There will be a bit of a lag, but not by much.