Everyone understands the importance of “location, location, location,” but not many grasp the specific factors that make one location better than another. If you’re a landlord or property investor, not being able to distinguish between the relative virtues of different properties can be financially risky.
For this reason, when you purchase a property, every real estate guru will tell you to conduct a thorough location assessment. But what makes a property so attractive to potential renters?
Here are a few of the critical location factors to weigh the next time you hunt for an investment property.
Of course, the kind of neighborhood renters prefer depends on the atmosphere they like. But the majority of tenants will look for a safe neighborhood, especially if they have children. In other words, they want an area that has little to no crime, and they’ll pay extra for it.
Though it may be hard to believe, there are still neighborhoods in the U.S. where people don’t lock their doors and aren’t afraid to let their children walk alone to school. These ideal neighborhoods may be few and far between, but they’re out there.
To assess the safety of your neighborhood, start by driving through it. If you see kids playing outdoors and neighbors talking with one another in yards, the odds are it’s a safe area. You can also check police reports to assess the crime rate.
2. Proximity to Amenities
If the neighborhood is a ways outside of town and it takes 15 minutes to drive to the nearest grocery store, it’s probably too far from amenities to attract most renters. Though some will enjoy the privacy, most will want to be within five to ten minutes of grocery stores, gas stations, restaurants, and hardware stores.
Just beware of locations that are too close to the hustle and bustle of a big city. It’s nice to be near all the attractive amenities, but if the unit is squeezed into a row of busy commercial properties, it’s more likely to be a turn-off for potential renters.
If you’re planning to market a unit to young couples or families with children, study the school zones. Being situated in a good school district is one of the most important deciding factors for renters who have or intend to raise a family.
Even renters without children will check out the school districts in case they decide to have children. They might also use this as a measure of the safety of the neighborhood.
To check out the school district, give the district headquarters a call or look up its reports from the preceding year. By examining their test score results, disciplinary problems, and ratings for teachers, you can get a general idea of how good the schools are.
Basically, the better the schools in that region, the higher the asking price is apt to be.
4. Views and Water Access
Look out any window of the property you’re considering. What’s the view like? Is the broader vista blocked by trees, walls, or traffic?
If so, that can lower the value of the home and scare away potential renters. Instead, look for properties that have a view that will attract potential buyers and raise your rent prices.
Likewise, if there’s water anywhere in the area, check its proximity. Lake- or beachfront properties will bring in a wider selection of renters, which gives you a greater chance of landing quality tenants who are willing to pay for that.
Tenants will pay richly for properties that have direct water access.
5. Access to Public Transportation
If you live in a large city, public transportation has a strong attraction. Many renters are extremely interested in renting a home that allows them to support the environment.
Besides looking into adding sustainable features to the structure, remember that a location that allows the renter to walk, ride the bus, take the subway, or ride a bike to work and the nearest amenities is a hot real-estate commodity.
When the commute to work and other areas of the city is affordable and sustainable, that’s a perk in any neighborhood. Look for an investment property with ready access to buses, subway stations, taxis, and bike rental stations.
Just as important as items that add value to a property’s location are details that can diminish its value. Several major red flags for renters will scare them away from committing to a property. For example:
1. Commercial or Industrial Sectors
Though the bachelor or bachelorette might love to live amid the hustle and bustle of an urban sector, if you’re looking to rent a property to families or couples who want families, an industrial area is a major turn-off.
A downtown apartment or home can be appealing, but if it’s stuck in the middle of a crowd of commercial buildings it will be unpleasant to renters and buyers. Heavily trafficked roads, especially if it includes big trucks, in a major city area takes away from the overall curb appeal and can reduce the value of the residence.
2. Near Railroad Tracks or Beneath Flight Paths
Imagine having to put up with the racket of trains and jets constantly traveling near your home. No family is going to be enthusiastic about that!
When you purchase an investment property, stay away from areas that are close to railroad lines and airports.
3. Close to Hazards
Crime aside, other hazardous areas can lower property values. For example, nuclear power plants are a major drawback for home hunters. Likewise, major construction zones, mines, work plants, factories, landfills, and swamplands can significantly reduce property values and renter appeal.
4. Economic Depression
Pay attention to the economic health of the neighborhood. If it’s not doing well economically, that’s a bad sign.
You can read the economic state of an area by going there and observing the general conditions. If the neighbors don’t show much pride in ownership and homes are poorly maintained, that’s a likely sign of poor economic conditions.
Similarly, if you see a lot of foreclosures and stores going out of business, steer clear of the area. When it comes to purchasing the perfect rental home, it’s integral that you thoroughly consider the location. Otherwise, you could easily get saddled with a house that no one will want to rent.
That’s where Green Residential comes in. We know the Houston area better than anyone and can be your guide to discovering the best possible locations for your rental homes in the area.
If you’re looking for a great location and property managers you can trust, contact us today!