Neighborhood Selection And Rental Property Investing

When seeking to invest in rental property, the neighborhoods you choose will greatly determine the pool of tenants you have to choose from. It will also greatly influence income potential. Creating even the best rental property in a neighborhood far from schools or with a high rate of crime will still garner less in rent than you are likely seeking, and you need to keep a realistic level of expectation when seeking to rent. Comparing citywide rent data can be helpful, but taking neighborhoods into consideration is critical.

One thing to look at when selecting a rental property as an investment is the access to transit. Are there buses available nearby? How far is the property from the city’s major employers? How far are the nearest schools? Grocery stores? Hospitals? In a world where we are constantly rushed, convenience matters a great deal to most tenants.

If you are looking to attract a certain type of tenant, you will want to really seek out a neighborhood that caters to them. If you are seeking to offer family friendly rental housing, a neighborhood near a park and near schools is ideal, while those looking to cater to retirees may seek to purchase property that is away from neighborhoods that are prone to loud parties, such as those near college campuses.

Crime rates are always important considerations when looking to invest in rental properties. This includes both violent and nonviolent crimes. Even if the property in question is safe and is equipped with alarms and other features, many high quality tenants will be wary of moving into a neighborhood with a high crime rate regardless of how low rent prices are or how many features your apartment includes.

You will also want to consider things like this when looking to make upgrades to a rental property. Adding in costly features in a high crime area increases the risk of vandalism and robbery and can actually make your tenants less safe. Adding a pool or other feature that attracts crowds may actually be unwelcome in an area that is primarily comprised of retirees. Consider the neighborhood and the people who reside within it when looking for a rental property as well as when attracting new tenants. A profitable rental unit will house tenants who fit into the existing makeup of the neighborhood. Few landlords take the time to consider this, but those who do often have a much higher retention rate.

By: Ken Boutilier

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Ken Boutilier is an Atlantic Canadian based real estate investor, trainer, speaker, consultant and entrepreneur who has combined his knowledge of real estate investing and Internet marketing to train and teach others how to increase their cash flow through successful real estate investing. Learn more at Real Wealth Atlantic.