13 Things to consider when selecting a Location

In today’s blog, we will examine thirteen things you should consider when choosing a location to invest in. We will discuss seven today and in the next blog we will cover the remaining six. If you are living in an expensive area, you will have higher costs to consider along with cashflow issues. However, if you travel outside of that area you will find properties that will suit any budget. You can change many things with a property except its location. So here are my tips for evaluating the right investment property

1. Distance. This is an important factor to consider. How far are you willing to travel to manage property investment? Take a map and draw a circle with a circumference within one hour drive. Then another for two hours, three and further if you are willing to travel that far. Then check what cities are located within those circles. A useful research tool is www.citydashdata.com.

2. Schools, The quality of the local education system will raise or lower the value of properties in that area. It will be much easier to rent a property to tenants utilising an education system. Tenants with young families and students will gravitate towards schools in areas with good reputations and traditions.

3. Employment. Jobs attract workers, and workers especially the migrant ones rent accommodation rather than buying. Choose an area with high employment rates and strong job growth prospects. This positive factor will be reflected in the local real estate market and you can check this data on citydashdata.com

4. Population. An area with a growing population rate will demand more housing units. These areas are ideal for renting. A trendy neighbourhood will attract population growth and new investment opportunities.

5. Neighbourhood. The type of neighbourhood you select will depend on the strategy that you are pursuing. Single-family homes are always easier to manage as the tenants are usually more mature and settled. If you are looking for a flip, then the residential suburbs are a good place to start as they are populated by families. If you want to rent to young professionals or students then proximity to shopping malls and schools are the neighbourhoods you will be searching for.

6. Insurance. Depending on the city or area you select, there may be hidden costs associated with local council requirements with regard to rates and repairs. Check if the property is in a flood zone or environmentally sensitive area. An excellent way to evaluate the risk is to check the insurance premium associated with the property or neighbourhood. If they are high, you should find out why.

7. Taxes. Property taxes can sometimes be forgotten when evaluating a potential investment property. Each city or local area council will have different property tax rates and requirements, so you must check these rates. I have seen differences in properties located less than three blocks away, so there are significant savings in calculating the tax rates before investing.

The first seven things you should evaluate are the distance from you, school quality. employment rates and job growth, population growth, type of neighborhood, insurance costs and property taxes.  Next we will examine the final six-pointers that I advise you check out when evaluating an investment property.

8. Walkability. This is an essential factor to consider, the proximity of your rental is to shops, restaurants and transport links, as a particular group of tenants will not have access to private transport. Being close to local amenities or transport links connecting with the city center can be a big selling point. I own a downtown property, but it’s close to a bus stop that can get you around town in 10 minutes. This property has been fully rented from day 1, so rentals within walking distance of shops, restaurants and transport links are always good investment prospects.

9. Amenities. Simply put, many renters don’t want to be in the middle of nowhere, having to drive 15 minutes to get to a grocery store. They want to be close to community amenities, and neighborhoods that have numerous amenities like parks, playgrounds, libraries and sports facilities are always the easiest to rent out.

10. Transportation. Easy access to public transport, such as bus or rail services, can open your property to many potential renters. This becomes even more important if you are in AP or D neighborhoods; this is more pertinent in markets surrounding big cities. For example, in the Washington DC area, the difference in rent for apartments with easy access to Metro versus those without can be substantial.

11. Crime. A safe neighborhood is just as important to renters as it is to homeowners. You don’t want to invest in a high-crime area as this can lead to many problems and damage through anti-social behavior. Several resources are available to check crime rates in an area, such as City Protect.

12. Development Plans. Check to see if there are any future construction or development plans for any specific area. This information is not readily available, but if you go to the city hall and ask for the master plan of the city, they will inform you of any future projects or developments that will increase the size of the local population. Also, check the social media platforms of big companies in that area to see if they have any expansion plans. These expansions will attract more people into the area through jobs and education, creating demand for more rental properties.

13. Intuition. Your gut instinct will be critical in determining the property you choose. Your instinct is finely tuned through experience and developing a good eye for property. Your judgement and intuition will be the final element that will close the deal. The ability to notice the gentrification of an area, its development and the feel of the neighborhood will all feed into your final decision. Just ask yourself, would I buy this property one year from now? Would it be worth more money? And would I have a good renter coming to live here? So you have to be in touch with yourself. But remember, this comes with practice.

So there you have it, 13 items that will help you evaluate and select a location. I hope this will help you on your real estate investment journey, and remember, I am happy to answer any specific questions you may have. Until next time, invest wisely. 

 If you want to learn more about investing in real estate then join our free Facebook group by clicking right here!

Scroll to Top