Many investors flock to real estate because of its ability to edge inflation and appreciate in value as time passes. Besides, strategic home renovations are an excellent way to increase the property value and attract more tenants along with other market factors that can indicate how much your rental is worth. Location alone can play a big role for prospective tenants looking for rent. That’s why it’s essential to know the factors tenants consider when choosing a rental neighborhood that suits their needs.
Top 5 Factors for Finding Your Perfect Rental Neighborhood
Low Crime Rates
Prioritize your tenants’ safety by opting for communities with low crime rates. After all, no one wants to live with the constant fear of getting mugged, making it harder for landlords in neighborhoods with high criminal activity to fill their vacancies. Besides, buying a property in a safer neighborhood is an investment that pays off in the long run. Use the community’s low crime rates as a selling point to attract new tenants since safety is a major concern for renters. Vacant rentals will spend less time on the market, saving money on running ads or paying utilities for an empty unit.
Proximity to Work and School
Make your rental the most convenient option for the working class and students. Besides safety, another factor that influences where people decide to live is how far the location is from their office or school. Rentals that are further away from these prime spots increase your renters’ daily transit, forcing them to get up earlier and arrive home later. As a result, most people would prefer to live closer, increasing the demand for rentals nearer to commercial centers, universities, and children’s schools.
Access to Public Amenities
Choose a neighborhood that improves your tenants’ quality of life. While living close to your workplace can make your commute faster, it isn’t always necessarily easier. That’s why renters also look out for access to public amenities like transportation before applying for a rental. Some renters prefer locations with a good walkability score, where they can easily access restaurants, gyms, parks, and pharmacies. After all, who wants to cross a highway just because they ran out of coffee in the morning?
Community and Aesthetic Appeal
Attract more renters by opting for a rental in a family-friendly environment. Neighborhoods with a strong sense of community, well-maintained homes, and attractive landscaping tend to have higher property values, and this vibe can leave a positive impression on potential renters. For investors looking for their next potential rental investment, take the opportunity to talk with neighbors and introduce yourself. It would also help to ask them follow-up questions about their community, what they like or dislike about it, and how active their homeowners’ association is.
Property Taxes
Avoid spending all your rental income on property taxes by opting for a house in a high-end neighborhood. Some investors make the mistake of looking for properties on the most expensive side of town in hopes that their better amenities will easily convert to more tenants and higher income. However, that isn’t always the case. As a property owner, find the balance between the rental income and your expenses as upper-class neighborhoods often draw higher property taxes. Thus, it would be most reasonable to invest in places with reasonable property taxes to increase your net profit.
Impact of Neighborhood on Property Values
Future Development Plans
Plan by looking for neighborhoods with lots of potential. While opting for a rental that is already in the perfect neighborhood can guarantee significant returns on your investment, developing areas can be a more lucrative deal. In other words, watch out for signs that it’s time to find a new rental when you spot places with projects that signal growth. These signs could include a new highway that improves accessibility to a previously remote neighborhood or the launch of a new mall and recreational facilities. Investing in such properties before they become highly sought after by other investors, maximizes your profits as their value can increase significantly with time.
Increased Demand
Be strategic when selecting a potential neighborhood for your next rental. You’ll go a long way in finding high-value properties if you prioritize the things your tenants do, including safety and accessibility. Besides, most renters are often willing to pay more for homes that meet their specifications, increasing the demand for the rentals, and boosting their property value in the long run.
Conclusion
Understanding why tenants prefer certain communities over others, and the factors that influence property prices can help investors make better decisions. If you want to get the most out of your investments, you should look for properties with reasonable taxes in neighborhoods with low crime rates. Additionally, prioritize locations that are close to bustling commercial hubs and schools to shorten your prospective renters’ commute. Properties that have easy access to recreational facilities, malls, and other public amenities are also a definite plus.
However, finding an existing rental that meets all these criteria can be a challenge, so don’t be afraid to opt for the ones with future development plans. As housing demand in these areas increases so will your property value, boosting your income and securing your investment portfolio.
Leave a Reply