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Real Estate Investment: Finding a Location

What defines a good investment? What factors might affect the value of your investment 5, 10, or more years from now?

Real estate investment is one of the best investments to help you generate long-term and ongoing passive income that will secure your future. However, this type of investment is vague enough and may not work for everyone if not taken seriously. How can someone be wrong with real estate investment? Failure to look for a "good" location is one of the main reasons an investment flops.

As a realtor, a developer, and a property owner who's been in the industry for several years, finding the "best" location for my investment properties is always the priority. Since I always ensure my clients' comfort and security, I always make sure to give them the top-tier service I can get them. For those aspiring real estate investors out there, remember this, you can always improve the property based on your market's preferences. You can change the paint color, replace the furniture and fixture, redesign its interior and exterior, but you can't change its location. Location, on top of everything else, matters. If your property is not accessible and is located in a less-than-desirable hood, you'll most likely have a hard time reselling it (if you decide to).

To help you find a "good" location for your investment, here are some factors to consider:

  • Transportation Options, Nearby Schools, and Amenities

The first thing buyers or tenants look into when checking out a property is how accessible it would be. Transportation-wise, are there subway stations, bus stops, or any public transport options. Is the property relatively close to grocery stores, shopping malls, dry-cleaners, restaurants, etc.? Additionally, regardless if your buyers or tenants have school-age children or not, considering if your property is zoned for a local school district and private schools should also be part of your property assessment. Considering all of these will make increase your investment's value.

  • Crime Rates

Since your buyers' and your tenants' safety and security are your top priority, it is best to check first how safe the hood is. No one wants to risk their safety and live in a neighborhood where crimes are rampant. We all want a safe place, and our home is our haven. Therefore, securing everyone's safety while living in comfort must be on top of the list. For property owners, just as how you perform a background check with potential tenants, do some background checks on the hood too. There's no harm in doing such. A good location is a peaceful location.

  • The Neighborhood

When assessing a good location, you also have to consider the community surrounding the property. Remember, you can't change your neighbor, but apparently, you can choose which neighborhood you want your investment to grow. How will you be able to secure a good community? While eyeing a property, take some time to walk around the area and spend ample time in the hood. A less-than-desirable hood will negatively affect the resale value of your property in case you purchase properties for flip and decide to sell it or even have it rented. A peaceful neighborhood is not having neighbors with loud pets, a party venue, or even fraternity houses. A peaceful neighborhood is a friendly community as per se.

  • Future Appreciation Potential

The higher the demand, the higher the value. In the real estate market, if your property is located in a community where the demand for people moving in is high, home value appreciates. Therefore, the more demand the location gets, the more opportunity for your investment to grow. Appreciation will continue to increase throughout the years.

The bottom line here is, location defines a good investment. You may have purchased a property; located in the heart of the city, highly accessible and progressive. However, it is surrounded by an increasing crime rate. You may have purchased a property with a tight-knit community feel but is deprived of access to amenities and transportation. The reality of it is that location has a huge impact on property value. If you want to grow your investment, you have to consider the major factor/s that might affect your properties' future resale value in case you want to sell them after a couple of years. Remember, real estate is one of the highest-earning investments. So be smart and use your investment wisely.

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