The location of a property is a key aspect to consider when searching for the right rental property to invest in. As per Kanat Sultanbekov, real estate location can make a huge difference in the success of the investment. It can impact the occupancy rates, rental income, as well as the type of tenants one attracts.
Kanat Sultanbekov underlines the factors to consider when selecting the location for a rental property
A smartly selected property location increases one’s chances of securing qualified tenants, as well as contributes to consistent rental income. Hence, investors must have a good idea of the factors to keep in mind when selecting a rental property. Here are a few of those factors:
- Low supply and high demand: Prior to selecting a neighborhood for property investment, one must research the area property to check if an adequate supply of rental property is available or not. One wouldn’t want to select an area that has too many properties already available for rent. The perfect neighborhood would be the one where people will want to live, but does not have too many vacancies. This would make sure that investors easily get tenants for their property who are ready to pay good rental rates.
- Neighborhood: The neighborhood one selects for their rental property investment would invariably impact the type of tenants get attracted to the property. For instance, if a property is located close to parks and schools, one is more likely to attract families with kids. On the other hand, if they invest in a residential area with good transportation or interstate access, they can attract a business person who commutes to various parts of the city frequently. If a person buys a property near a college, they additionally may get students who rent only during the school year.
- Amenities: Long term tenants like families tend to prefer amenities like proximity to grocery stores, good in-city transportation options, as well as good schools and hospitals in the neighborhood. Month-to-month tenants like students or young professionals may however prefer rentals with access to public transportation, restaurants, and tourist areas.
- Safety and crime: No one would readily want to live in a high-crime area. Hence, it is prudent to research the crime rates of an area before investing in a property there.
- Job market and development: Localities with growing employment opportunities typically attract more tenants. Hence, it would be a good idea for investors to keep an eye out for announcements of large employers moving in and requiring employees in a certain area.
- Property appreciation: When searching for properties, investors should consider checking areas with strong growth in their employment rates, big development projects taking place and/or places with good household income. Purchasing rental properties in such markets can result in large profits on the investment.
In the opinion of Kanat Sultanbekov, cash flow is the lifeblood of any rental property, and hence checking the average rent of an area is also critical prior to investing in a property there. After all, if the average rent does not cover all of the operating costs and debt service, the property is not worth owning.