When the real estate market is booming, it barely matters where your investment property is; you’ll be able to sell it for a profit or easily rent it out. However, when the market is more stable, or even when house prices are falling instead of rising, location is going to be the most important factor of all when it comes to your investment property. If you have a property in a less desirable area and you need to sell it, you might find that you have to wait a long time for a buyer or that you have to sell for less than you want to. Either way, it means your investment isn’t such a great idea in the end.
This is why choosing the right area to buy a property in, even if you’re not an investor but simply want somewhere to live that will give you a retirement income when you sell later on, is crucial. Here are some of the things to think about when choosing an area to buy a property in – getting this right is vital.
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Affordability
One of the easiest ways to narrow down your choices when it comes to where you’re going to buy a property is the price. Some areas are much more expensive than others, and it might only be the difference of a few streets between those areas, but it can make one place affordable and another less so.
By looking at your budget, you can immediately rule out some places that might have been on your list of potential areas to consider. Or you might be able to afford something in those places, but compare it to somewhere nearby that isn’t so expensive; how much more property could you get for the same money just a few miles down the road?
You’ll need to work out whether a prestigious location or a larger property is your priority, and once you know this, you’ll have a much better idea of where to buy.
Employment Opportunities
When you buy a property to live in, you’ll need to think about your work – after all, you need to be able to afford the mortgage each month, and having a job that allows you to do this is crucial. There is no point in buying a house that is far away from your current job because you might not find another – unless, of course, the property is in an area that has plenty of job opportunities. In that case, this plan might work (although it is still risky, so make sure you are prepared).
This might not be a consideration you think about if you are buying a property to flip or to rent out. However, it should be. No matter what you intend to do with the property, whether it’s for you or someone else, employment opportunities are very important. If there is no work to be had in the area, fewer people will be interested in living there, and you might find it hard to sell or rent the property, and you may even have to run the risk of losing money on it.
Crime Rates
Some areas are cheaper than others because they aren’t as close to a highway or they don’t have a train station or they’re not near good schools. Some are cheaper because they have high crime rates. The first set of issues can potentially be overcome, depending on what you need from the property (the buyer or tenant might not need to take trains, or drive anywhere on the highway, or even think about how school ratings affect home values, for example). Yet the second issue, that one about the crime rates, really can be problematic.
Any potential buyer or tenant who is researching the area will come across these statistics, and if they are high, they could be put off from spending money on your property. If they are still interested, they could use this information to make a low offer. This is why you need to do the same research. You need to be aware of the crime rate in the area you are buying property. And then you need to determine whether it’s going to be a problem for you.
Climate
If you’re buying property close to where you currently live, then the climate may not be an issue – it’s probably not something you’ll even think about because it will generally be no different to where you’re living now.
If, however, you’re buying a property further away, it’s important to consider that the climate might be different, and that could be a positive or a negative depending on where you are now and what you’re buying. If you like the heat, a cooler climate isn’t going to work, and vice versa. The climate of where we live needs to match our personalities and what we like to do. Otherwise, it can have a real impact on your mental health and even your physical health.
Again, even if you’re not buying a property for yourself but intend to use it as an investment in some way, the climate is going to be a crucial thing to think about. You need the property to be occupied or bought quickly, and choosing an inhospitable environment will make that harder to achieve.
Conclusion
Before anything else, when it comes to buying a new house or apartment, the location has to be decided on. Not only will this make the final decision an easier one because it will narrow down the number of properties available, but it will also help you to determine whether or not you’re making a good investment.
There will have to be a compromise in many cases. The cheaper the property, the less desirable the location, and the more expensive it is, the more likely it is that people will want to live there. Are you happy to spend more money initially or less? What is going to give you the outcome you’re looking for?
