Are you considering investing in property? This is a venture that many consider because of the profit potential it has. If you make the right investment, you will have passive income streaming in annually. However, it is difficult to choose a property to put your money in because of the many factors you need to consider. One big factor that affects the current and future price of properties is the neighbourhood it is in.
Experts weigh in on their property investment tips when it comes to assessing the neighbourhood they are in.
Quality of the Schools
This is a determining factor if you plan to lease the property you bought to a family with a child or two. Visit the schools in the neighbourhood or browse them online. See where they rank in the region or nationally for the levels they offer. Look for statistics that cover the average test scores, famous or noteworthy alumni, history, demographics and other pertinent information you may need for the assessment. Some prospective lessees want their home to be near a school they will send their child to.
Crime Rates and Safety
One of the reasons many leave a neighbourhood or do not choose it is because of the high crime rate. This can come in various forms such as the presence of gangs, high theft rate, break-ins, presence of sex offenders, assault and other similar crimes. Families or even those without any do not want to live in a place with a high crime rate. Ask for information or browse the website of local law enforcement agencies to get a glimpse of the numbers.
Check the Historical Values
Some properties have increased in value throughout the years because of developments around it or the changes in the market. The old numbers cannot predict future prices, but it can provide you with a glimpse of its trajectory, whether it is on the decline or on the rise. Gradual increases provide you with insight on if it is time to make a purchase or wait a little longer. Discount outliers when prices suddenly soared or dropped to get a better forecast of how the property’s price may change or stabilise.
Get an Approximate of the Number of Homes for Sale
Go to the neighbourhood and count the number of “for sale” signs you see. If there is a lot it can mean two things, one is many are planning to leave and the other is that you might get a better price. Identify the reasons people are selling, this may affect the price of the property you want to invest in and lease in the future. You do not want to make an investment and have difficulties finding a tenant or re-selling it.
Some people want to have a bit of everything nearby or just a short drive away when they buy or rent a property. Capitalise on this perception by looking for properties that are near commercial centres, tourist attractions, restaurants, bars and offices. These increase the property’s value and allow you to charge a higher rent when you let.
These are some of the factors that allow you to assess the neighbourhood of the property you are eyeing to purchase. Consider these in your decision-making process to maximise your investment.