Investing in rental property is often a wise decision due to its inflation hedge – the potential rental income or market value of the property is likely to remain unaffected during the inflationary phase. However, choosing the right location before investing in the rental property is a crucial decision since it can make a difference in the success of the property business. According to Kanat Sultanbekov, the selection of the right location is likely to affect the chances of securing quality renters who eventually contribute to a steady rental income flow and the overall success of the business. Therefore, having a thorough understanding of the factors that affect the section of a location is vital for making a smart investment choice.
- Research About The Local Market
Before choosing a rental property, an investor needs to have an insight into the supply and demand dynamics of rental properties in the chosen neighborhood. The key pointers to consider are the rate of vacancy, rental prices, and demand of the location to renters. Simply put, a place where the vacancy rate is adequate and rental prices are almost stagnant, clearly indicates that the property market is saturated and thereby is not the right place for investing. On the contrary, if the vacancy rate is negligible, people are hunting for rental properties, and the rental rate is upward it might have a robust rental market potential.
- Accessibility with Transportation Options
The majority of tenants prefer residing in multifamily houses that are easily accessible and have wide options for transportation. Therefore, while choosing the location make sure to keep this factor as a priority. Having a rental property located adjacent to main roads, public transportation, metro station, etc. will be more attractive to potential renters. Equally, the neighborhood should have access to the most vital amenities including grocery stores, schools, colleges, healthcare centers, and shopping malls. Moreover, proximity to entertainment venues and popular attractions of the city will be an added attribute of it, though not essential.
- Safety and Crime Rates
None wants to reside in any crime-prone area. Therefore, it should be a major concern for investors to conduct detailed research to find the crime rates in the area. Consider the safety factor, the standard of local administration, nearness of the police station, and the fire brigade to ensure the safety and well-being of the tenants. Visiting the local enforcement department is the best choice to gain an in-depth understanding of the safety issue of the location.
- Property Taxes
Property taxes often vary widely across the chosen area. Before choosing the property to invest in, investors need to be caring about the property taxes that they will have to pay every year. In the opinion of Kanat Sultanbekov, paying high property taxes may not be a major issue, provided the property has the likelihood to attract tenants for the long term and the neighborhood has a demand for potential tenants. Visit local country offices where the details of current tax rates on properties are easily accessible.
- Consider School Districts
For family men with kids, choosing a rental property in school districts is a major consideration factor. Noteworthy, properties having proximity to high-performing school districts often experience a higher demand, enabling the property owners to hike their rental prices. So, researching the quality and nearness of schools should be another major factor for consideration while choosing the location.
- Job Market
Areas where the job market is promising typically drive tenants and families with job seekers. In fact, properties located in these areas can fetch higher rental as well as long-term tenants. So make sure to verify the job prospects of the chosen area before investing in it.
Finally, considering the future development plans of the location is also an important factor as it is likely to affect the rental income. Areas with plans for the development of commercial centers, and public amenities IT hubs are major indicators of the growth of the local economy and equally witness an increase in the demand for rental properties. So, keep all these factors in mind while choosing a location for a rental property business.
