They tell you that the 3 rules of real estate are location, location, location, but ask 5 people what they think is the best location for a real estate investor and you’ll get 5 different answers, and here they are; 5 tactics that you can use to identify great rental locations:
- Stable City Rentals
If you’re interested in investing in rental properties, you may want to consider inner city and urban areas for a couple different reasons. It’s true that the rent you charge here will be a little lower than elsewhere, but on the upside, it’s very easy to find renters for these properties, so they’re always going to be earning, where high priced apartments may be empty more often than not. Secondly, the value of these places tends to remain stable, so there’s little fear of a market crash or plummet with urban apartments.The middle ground tends to remain fairly stable, too, and at a generally higher price. Most people cannot afford a home in the hills, but they may be able to afford the next best thing. In any event, affordable housing in the city is easy to rent out and tends to remain stable.
- Coastal Property and Homes in the Hills
4 out of 5 Australians live within 50 kilometres of the coast. What that should tell you is that, while coastal properties may be a little more expensive, they’re always in demand. Homes in the hills are also high in demand. The location and price on these homes means that you may do well to find a buyer, but the stress of finding tenants to rent to on a monthly basis may be a bit much.There will always peaks and valleys in the demand for premium, expensive homes, so you need to be smart and know your market so that you can ride those ups and downs instead of letting them throw you for a loop.
- Neighbouring Locations
It’s common for a wealthy family to move to a certain area to be closer to a private school. If you own a home in the neighbourhood they’re looking at, you may well be selling or renting to an affluent family who are willing to pay any price for a home in that spot.Other great locations following this rule are those in walking distance to great parks, restaurants and grocery stores. Keep an eye out for areas that are still developing, areas where there may not be anything there just yet, but where, in the future, you’re going to have a house that’s right between an art museum, a grocery store and a great Chinese buffet.
- Urban Renewal
Now and then the government will decide that it’s time to tear down an abandoned industrial district and open it up for residential development. In these instances it’s a good idea to jump onto that bandwagon while you can because the area is likely to see an economic boom in the coming months.Of course, these projects can be a little more demanding as you may need to build homes from scratch or completely remodel old office buildings and so on, but the opportunity for those who are willing to put in the time, money and effort is tremendous.
- Old Homes and Fixer Uppers
Finally, you have old homes, beat up shacks, fixer uppers and run down tenements. These are usually in locations that are perhaps not the best, but that have real potential with one or two nice houses on the block. By improving one or two homes in an area, the property value of that area can improve tremendously.This sort of location hunting requires some patience as you’re actually taking a less than perfect location and trying to improve it, but the eventual payoff for your relatively low investment, in addition to knowing that you’re helping a community get back on its feet, add up to a tremendous personal and financial reward.