Whether you’re looking to purchase your first rental property or hoping to add to your investment portfolio, choosing the best property in the right location is crucial to your success. Let’s take a look at the top five tips for choosing the right neighborhood for your rental property.
Find out About Nearby Schools
The neighborhood you choose can have a significant impact on the types of tenants you attract. For example, if you’re looking to purchase in a college town, the tenants you attract will probably be younger students with limited credit history. On the other hand, choosing a property close to an elementary school may attract more established residents with children.
Consider the Crime Rates
Both the police station and your local library can help you obtain accurate crime statistics for various neighborhoods. Vandalism, petty crimes, and serious crimes are all important factors that can impact the value of your investment. You may also want to find out how often the police visit the neighborhood due to complaints.
Check out Nearby Amenities
Parks, malls, movie theaters, and access to public transportation are all amenities often sought out by renters. Drive around the area to see what, if any, of these amenities are nearby. Sometimes, you can even find literature on planned attractions that are coming soon.
Learn the Statistics
There are several statistics that can greatly impact your success as a landlord and can help you make a more informed decision before you invest in a specific property. Before you buy, do your research on residents in the area to find out the following information:
- Median Home Value
- Median Income
- Percent Employed
- Percent of Owner-Occupied Homes
Evaluate Your Needs
When choosing a rental property, you should consider your financial goals. If you’re looking for immediate cash flow, you should choose a home where you can charge enough rent to more than cover your expenses. However, if your goal is to benefit from a home’s appreciation, you may want to choose a newer property that will increase in value over time.
Purchasing a rental property can be a great investment that allows you to provide a nice home for a new tenant. To ensure your ultimate success, make sure you choose a property in a neighborhood that aligns with your goals.