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Investing in real estate can be quite lucrative, but only with one caveat. In order to make your real estate investments successful, you must keep location in mind. Yes, it may sound cliche, but the location is still a critical consideration when purchasing real estate because it has a direct impact on how well the property does as an investment. Here's how to use location to your advantage when buying investments.
Consider Your Target Demographic
First, consider the target tenant for your investment. Then, consider what that person needs in a home. For instance, if you're buying an investment that's going to appeal to millennials, consider what they want. These adults are typically in their careers and have children or are planning to have them soon, so they likely want to live close to employers and schools. Sometimes access to public transportation is important for this demographic too.
Understand That Schools Are Key
Next, consider where the good schools are located in your area. Schools may not appeal to all of your potential tenants, but they are important in the overall value of the home. Being in a top-rated school district or near top-rated schools makes a home more valuable in general. Don't forget to consider plans for future schools or school upgrades, because investments should be long-term in nature.
Check Out Local Amenities
Is the home near shopping and dining options? Will the residents have easy access to a grocery store? Does it have parks or recreational opportunities nearby? Most of the time, tenants or buyers want these important amenities within a five or ten-minute drive of their house. If you can find an investment conveniently located near local amenities, it will be more valuable than one far from them, particularly if you're going to use it as a rental.
Dig into Neighborhood Safety
While your real estate agent is ethically bound not to talk to you about the safety of the neighborhood, you have many tools you can use to investigate the area. If you notice that an area is high in criminal activity, it's probably not the right one for your consideration as an investment. People want to live and work in safe communities, so researching this aspect will help you choose a solid investment.
Check Public Transportation
If your city has a good public transit system, consider investments with easy access to this. Not all cities do, but this can be a major perk if yours is equipped with one. People who can use public transit can leave their cars at home, and this can help them save money. For some, this is a feature that they look for when choosing a home to rent or buy.
Investing in real estate requires the right strategic planning. To make sure you are ready, research location well. Finding a great property in a great location will help you find investment success.