You?ve probably heard it a million times?the idea that location is everything, repeated in every context imaginable. But it happens that it is true, especially in the real estate industry. Whether you?re looking to rent or invest and rent a property out, there are several things Jason Hartman thinks you should consider before sinking your hard-earned money into a property.
Looks aren?t everything
Upon first glance, the property in question may seem like an excellent idea. It?s in a city you like and appears to be in good physical condition. The neighborhood seems nice enough. But before you invest, remember to check out other factors. Is it an established neighborhood? What is the crime rate like here? Of course, its also important to fully inspect the house?the condition of the foundation, insulation, windows, etc may not be readily apparent if you aren?t an expert, but will greatly impact your return on investment.
Think about climate and how that impacts potential wear and tear on a property. If you?re unwilling to put the time and/or money into comparing these factors, consider another location.
When you?re selecting someone?s potential home, it is important to consider the local culture. Depending on who your target audience is, it may make more sense to choose a house in one location versus another. If you?re looking to rent to students, it is important to buy near a campus. If you?d like to rent to elderly folks, you may want to be near public transportation, etc.
It?s also important to consider the types of businesses that will be around you. If you?re highly opposed to tenants who drink, it may not be wise to buy near a downtown area with a late-night party culture. Consider your target audience and choose a location according to their (and your) needs.
Local Business Environment
Often overlooked, the state or country in which you choose to conduct business can have a significant impact on your experience and profit. Differing tax laws, fees, and regulations should be a deciding factor in choosing your location. Also consider the accessibility of services you may use (cleaning/maintenance services, possible advertising, etc) and availability of a possible workforce.
Similarly, take into consideration the level of competition in the area. If there are a lot of rentals (and they?re going unrented) it may not be the right area to invest in real estate. If there are a lot of rentals and they?re being rented, consider strategies to set yourself apart.
Of course, there are other things worth considering?whether or not you?ll be managing the property yourself, how much rent to charge, etc?but by choosing a location that best meets your needs, you?ll make the rest much simpler.?(photo credit: PhantomMenace via photopin cc)
The Young Wealth Team