Location – “location, location, location" is a very common term when it comes to real estate investing due to its importance. What makes a city & neighbourhood attractive for real estate investment?
Picking the right location is vital for a successful real estate investment. Choose wrong and the investment will likely underperform. In addition, it may take a very long period of time to yield attractive gains. Read on to find out what it takes to be a strong location for investment.
When you’re choosing a location, pick an area with growth. Growth in the following areas: Economic, Population and Employment will ensure that your investment will be attractive for the foreseeable future. Growth means investments are being made, future prospects are bright, the area will flourish long term and as a result, your investment returns will be higher.
How is the economy of the location doing? Are new businesses opening? Are businesses making new investments in the area? Is the local government investing in themselves? Is the news being reported for the area favourable?
A location with excellent economic growth will attract people and investments since the future prospects are bright.
Population will grow in two ways: people moving into the area and birth rate. A positive indicator for a location is that population is continuously growing because of people moving into the area. This indicates that the area is attractive to make a living and as a result, investment will typically follow as well.
Employment Growth – What is the current employment rate? Is it growing? What employment sectors are hiring and growing?
What kind of workers are being attracted to the area? Are they students? New graduates? Experienced professionals?
The ideal location will attract a healthy mix of all types. In addition, employment growth in new & innovative industries will ensure the long term prosperity of a location.
To be considered liveable, an area will fulfill these requirements: Accessibility, Appearance, Amenities, and Safety. An area with strong liveability will attract people and make the area ripe for investing.
Accessibility – Is the area walkable? Can you walk to do daily activities like shopping, groceries, learning, and exercising?
Appearance – What does the area look like? Is it attractive? Are improvements being made?
Schools – What is the quality of schools like in the area? Families be attracted to high quality schools in the area.
Green space – A healthy and attractive city will have green space in the vicinity in order to stay vibrant and as a place for people to gather and enjoy the outdoors.
Public transportation – How easy is it to get around without a car? Are investments being made to grow the public transportation system? How close is the nearest bus stop and train station?
Local government – What is the local government doing to make the city a better place to live?
Regeneration and Future Development
Are there any regeneration projects happening in the area? What are the future development plans in the area?
An investment will have a strong future outlook when located within a regeneration project due to the improvements and integration of residential, commercial, and retail in the same area.
Growth in Rents & Appreciation
Upside along with growing rents and growing appreciation will be the result from the factors discussed above. By choosing a location that meets most of these criteria, you can feel confident in your chosen property and relax knowing that the investment is likely to help meet your goals.
Want help choosing the right location for your real estate investment? Contact us for a consultation today!