3 Ways to Find the Best Locations for Your New Property Purchases
You have a property or two under your belt, but they may be either a home you formerly lived in or a one-off investment. Now you’re ready to look at new investment properties by researching the best locations for your next purchase. Property managers have plenty of tools at their disposal to help them determine the hottest markets for income properties. There are three key trends to consider when you’re trying to predict which markets will be the most lucrative in the short, medium, and long term.
1. Pay attention to redevelopment programs
Some areas of your city may look like they will never recover from blight, but keep an open mind. Many city officials, developers, etc. seek to develop the most undesirable neighborhoods through a variety of initiatives. In many cases, these efforts result in improved housing prices in areas that would previously have made for a bad investment.
Timing is key. You should try to purchase in these areas while revitalization programs are kicking off and appear successful, but before other investors realize the neighborhood will be a real estate hot spot in about five years. Another advantage of redevelopment programs is the fact that they often result in lower costs when purchasing a property, as there are sometimes local subsidies offered to people willing to invest in areas that are being rebuilt. Talk to your local chamber of commerce to determine whether programs like this exist in your area.
2. Watch where businesses are building
Before you select the location of your next investment property, take the time to track the areas where businesses are setting up shop. This allows you to purchase your property in a commuter-friendly area. Businesses may be cropping up because of the aforementioned redevelopment programs, or they may be taking advantage of a buyers' real estate market. Either way, new businesses can be a tip off that a neighborhood is growing and will be appealing to a tenant. If businesses have branches elsewhere in the country, it’s also likely that they are relocating employees from other regions. This helps drive the demand for rental housing, since recently-relocated professionals may want to rent before purchasing a house in the area.
3. Keep track of school district rankings
School district rankings are long-term metrics to track. Choosing a property within range of an excellent school districts helps you attract parents for whom well-ranked schools are an important variable in choosing a home. Consider seeking out school districts that are making major improvements to schools. This allows you to purchase a property before the real estate costs reflect the proximity to desirable schools. When you purchase an investment property in a good school district, you’re getting an investment property that is geared for long-term success, since parents will always want their children to attend the best schools.
Purchasing lucrative investment properties is part luck and part skill. As you gain experience in property management, you’ll find that the skill portion of the equation helps you develop long-term strategies for taking advantage of rental and property trends. By conducting a little research and keeping an eye on the happenings of an area, you can locate the next real estate hot spot before it gets going.
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