The importance of the location in real estate investing cannot be stressed enough: the building can be modified but the property location is forever fixed. Whether you’re looking to purchase a long-term rental, a seasonal vacation getaway, or a fix & flip project, reflect on the ramifications of your purchase’s location. Although you may have already accounted for things like appearance and amenities, have you driven past the property during different times of day to check how heavy traffic may be? Have you thought of buying in a neighborhood with a great school district? A property near a good school is more likely to maintain its value and is a great option even if there may not be children living in the property. Carefully consider the location and how it will impact you during your next hunt for the perfect real estate investment property.
First, let’s address the more obvious considerations. Research the property neighborhood by checking how accessible the property is to major roads and freeways. Is the property centrally located and gives people an easier work commute? Purchasing a property away from larger roadways may be a decent strategy if you want to rent out “off-the-beaten-path” vacation rentals but it is unlikely to attract a busy, working class family. Remember to include how much taxes, insurance, and utilities may cost in that location as well. Also, don’t be afraid of developing neighborhoods but instead see if there are any indications of the area improving in the future which may mean you are paying less for a property that will increase in value.
Next, think of what the best use for the property so that it is always occupied and cash flowing. If you are buying a property in a college town then finding renters will not be an issue because of the constant demand for housing. However, keep in mind that upkeep and maintenance costs may reflect a higher turnover rate, increased repairs, and potential noise complaints. A rundown property in a nicer, suburban neighborhood may be a better fix & flip project than keeping it as an expensive rental property that is harder to fill. Bustling cities with plenty of tourist attractions or large festivals will likely have some great opportunities for short-term rentals like those found on Airbnb or VRBO.
Finally, who is your ideal tenant, and will they want to live in that property location? Younger generations will likely want to see amenities such as restaurants, shops, and entertainment centers that they can easily access. Families with children will want grocery stores close by, community parks and a good school district for the kids. Walk around the neighborhood and talk to people to get a feel for what kind of neighbors your tenants will have. You may even consider talking with local police officers to gauge the safety of the area.
Factor in the location no matter what property you choose to purchase. Know what your investment strategy is and how the property location can help your real estate business succeed year after year. Reach out to RCN Capital if you have a property in mind or just want to see what kind of financing help you can get to make your business grow. We can help fund your next vacation rental, traditional long-term, or fix & flip project in as little as 10 business days!
This article originally appeared on the Mortgage Professional America website. View the full article here.