The old real estate adage of “location, location, location” remains as true today as it ever was. The most significant factor in making a lucrative real estate investment is the location of your property.
There’s a good reason why many people follow the advice of buying the most affordable property in a location that would otherwise be outside their price bracket. You can improve a property over time, but you can never change its location.
Why is location important in real estate investment
When you buy a property, you’re buying more than just a house or an apartment. You’re also buying a plot of land - and you’ll never be able to change the location of that land. The age-old economic principle of supply and demand comes into play here. Homes in great locations are limited by the amount of land available and will always be a sought-after commodity.
The importance of location in real estate investment also relates to how easy it will be to resell your property when the time comes. Even if you have a lovely home, you will likely struggle to sell it if would-be buyers don’t see great potential in the neighbourhood.
What to look for in an investment property location
An ideal investment property will be in a low-crime area that offers both privacy and quick access to various amenities. Transport links, access to freeways and arterial routes, proximity to well-ranked schools, neighbourhood watches and community involvement are all factors that come into play in these decisions.
Neighbourhoods and areas change and develop on an ongoing basis. One of the handiest property investment tips one can follow as a savvy investor is to keep track of these patterns. An area can either transform from undesirable to “up and coming” or from prestigious to less desirable. Identifying areas that are experiencing positive change can be a great way to make a well-timed real estate investment. On the flip side of the coin, recognising the early symptoms of urban decay can guide you away from less-than-ideal investments.
What are the benefits of residential property investment?
There are a myriad of benefits to making smart residential property investments, starting with a passive income and - in certain circumstances - tax benefits. Although being a landlord comes with the need to maintain your property, rental properties usually generate a regular monthly income while simultaneously appreciating in value.
Real estate investors with well-chosen assets can make the most of benefits like predictable cash flow and excellent returns. Investing in real estate is a great way to generate wealth and build equity, as property appreciates naturally over time. Even as markets fluctuate and circumstances change, real estate remains one of the most stable investments.
Top ways to research potential investment locales
Getting advice from an experienced property practitioner is a great place to start. They know the various neighbourhoods in their areas of specialisation like the back of their hands and will be only too happy to guide you in the direction of valuable investment properties. Another great strategy is simply to drive around the area you hope to buy at different times of day to get a feel for the area. Various online reports relating to recent property sales in the neighbourhood you’re looking at will also provide valuable insights.
Evaluating location remains a critical cornerstone in evaluating property investment opportunities. Get in touch with the team from Seeff and let us help you grow your property portfolio from strength to strength.
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