Taking your first steps into the world of real estate investment can be daunting. After all, other than the fact that they should have a decent number of walls and a leak-free roof, what do we really know about the finer points of the real estate market.
Like with any good investment, you want to do a fair bit of research before you spend some cash. So, what makes a property a worthwhile investment? What takes it from simply okay to ‘just right’. You want a property that’s not too expensive, not too cheap, not too big, not too small, not too hot, too cold, too hard, too soft… you’re looking for a property that would suit even the pickiest of tenants: a Goldilocks property.
So, aspects do you need to consider when choosing an investment property?
As the saying goes, when it comes to real estate it’s all about location, location, location. The neighbourhood in which you invest will determine the types of tenants you’ll be able to attract and the turnover you’re likely to see. For example, a property in a university town will likely see an annual turnover as students move home for the summer. It is also important to consider the schools in the local area. If you’re investing in a family home you’ll likely attract more tenants if your property falls in a good school district. Another thing to consider is that once a child starts school, families are unlikely to move out of the school district and risk uprooting their kids so if you’ve got a good school nearby, you’re likely to see reliable tenants stick around for years. Another thing to consider that can affect the value of your property is local crime statistics. Check the rates of vandalism, break-ins and other serious or petty crimes, as well as the overall crime rate, whether crime is on the rise or fall, will reassure your tenants. To read more about what takes a neighbourhood from good to great you can check out this article.
Jobs Opportunities In The Area
When a major company moves into the area, people will flock to snap up empty properties nearby and the jobs that come along with it. US investors can check out statistics relating to job availabilities in their local areas with the U.S. Bureau of Labor Statistics (BLS). Depending on the company that is moving into town, a corporate announcement can cause rental prices to either rise or fall. There is no surefire way to tell which way prices will be affected but if it’s a company that will offer stable, well-paying jobs that you would want in your local area then it is probably good news.
Local Infrastructure and Developments
Before you invest in a property it is important that you check out the local neighbourhood. Take a walk around the area and see if you could picture yourself living there. Check out the parks, cafes, theatres, public transport routes – imagine the sort of life the people living in your property could have! Keep an eye out for planned future developments that have already been zoned. While periods of ongoing construction could momentarily damage rental prices, the development will pay its dividends when new libraries, parks or educational institutions become a part of the local area.
Real Estate Statistics in The Area
Always be aware of the competition! If a neighbourhood has an unusually high number of listings you may want to steer clear of making an investment in that postcode as the listings could be emblematic of a seasonal rental cycle or a declining neighbourhood. As any landlord knows, high vacancy rates lead landlords to set lower rental prices and low vacancy rates allow landlords to raise the price of rent overall. You’ll also want to look up the average rental prices in the area. As a real estate investor, the income you make from rent is how you provide for yourself, feed your family so you need to make sure you’re going to be able to cover mortgage payments, taxes, the expenses of maintaining the property and still have money left over to provide for yourself. For more advice about becoming a real estate investor and rental statistics check out this informative website.