You don’t have to be an experienced real estate investor to know that location is important. It’s important when choosing an investment, marketing that property, and attracting good residents. The location of your property will impact what you earn in rent, how well you retain tenants, and how much the value of your investment increases over time.
Location is also important because it cannot be changed.
Any investment property can undergo improvements and renovations to help it grow in value. You can add onto a property or even break up a large home to make it two separate units.
What you cannot do is change its location. Once you buy an investment property, it’s going to stay where it is for the entire time you hold onto that asset. Potential tenants will either love the neighborhood or they won’t; that’s going to impact vacancy time, rental value, and turnover.
Location is powerful. Here’s how to find the right neighborhoods when you’re considering investing in real estate.
Pricing: How Location Impacts What You Pay and What You Earn
Real estate appreciates based on the market, which is influenced by supply and demand. The location makes a property more or less desirable to buyers and to tenants. As demand increases, so do real estate prices.
When you’re buying an investment property, you can expect to pay more for properties that are in excellent locations. That’s okay; you’ll more than earn that back because your rents will be higher and your home value will increase more.
A property’s location has a larger impact on home prices than anything else.
When you purchase a residential investment property, the amount of rent you can charge will depend on that property’s location and how convenient it is for your tenants. Renters want easy access to schools, their favorite grocery stores, restaurants, and entertainment. They want to be close to parks and recreation.
The more you have to offer renters, the higher your rents, and it starts with location.
Neighborhood Features and Amenities
So, what makes a good location for a rental property?
Some of the features to look for in the location of your investment property include the following features.
- Easy access. Residents in and around Charlotte love their cars, and they’ll want to be within a quick drive of major roads and highways that take them to work, school, and social activities.
- Safe neighborhoods. Tenants are looking for neighborhoods with low crime rates. They want to feel safe walking around their neighborhood and they want to be sure their children can play without being overly concerned.
- Reliable infrastructure. Are the roads and bridges in good shape? Are there shopping centers nearby, and good restaurants? These are the types of things that contribute to a well-located investment property. People like parks and preserves. They want to know the neighborhood is close to a police and fire station as well as hospitals.
Tenants, in general, are looking for attractive rental homes in desirable locations. They don’t want to live next door to commercial businesses or industrial warehouses. Think about the neighborhood and what it offers before you buy an investment property.
Choosing Your Neighborhood
You’ve decided to invest in the Charlotte area because you recognize there are amazing opportunities here. Some of the best neighborhoods for investment properties include Matthews, Ballantyne, Monroe, Indian Trail, Stallings, Mooresville, Concord, Pineville, Huntersville, Waxhaw, Fort Mill, Harrisburg, Wesley Chapel, Midland, Kannapolis, and any of the communities around Mecklenburg County, Union County, and Cabarrus County.
This is the right place to invest. But, when it comes to choosing exactly the right street or building, what are you looking for? You’ll have to narrow your search to some specific neighborhoods. Selecting a great property in a bad neighborhood will not lead you towards investment success.
Evaluate the following when you’re considering a neighborhood:
- Resident demographics. What’s the average income? Do most people own or rent? Buying in a neighborhood that has a higher median income means you’ll likely get higher rents, but you’ll also buy at a higher price point. While a neighborhood with a lower price point will also have a lower median income, you can save money at the point of purchase, but you may lose money by collecting less rent. Sometimes, there is also higher turnover and maintenance costs associated with neighborhoods that have lower median incomes. A neighborhood with a moderate income level is ideal; you won’t spend too much, but you can still count on stable rents and reliable tenants.
- School districts. A good school district is important even to tenants who don’t have children. It contributes to the health and wholeness of a neighborhood to have good schools in the area. Rents will always be higher.
- Transportation. Tenants want low commute times. Will they have an easy time getting to and from work?
Property Managers Understand Location
As you’re looking for an ideal investment property, partner with a local property manager before you make an offer. Your property management team can tell you more about the location, and they can describe it from the perspective of a tenant. This will help you understand a particular location’s advantages and challenges. You can expect a full analysis of the neighborhood you’re considering, as well as some recommendations on how you should negotiate the purchase. You’ll have access to reliable data that will tell you how much rent you’re likely to earn and what sorts of tenants would be likely to apply for your property.
Analyze the neighborhood carefully before you invest. You might be considering what seems like an ideal investment property, but if the surrounding area is rough or the homes are not maintained, you might have trouble renting out that perfect house.
We’d love to help you. Please contact us at Wess Cason Realty. We provide real estate and property management services in Charlotte and the surrounding areas in Mecklenburg, Union, and Cabarrus County.