We’ve all heard that when it comes to real estate, the most important factor is location, location, and location. Well, that’s a good rule of thumb, but don’t for a minute think it’s that simple. For instance, and in addition to location, there’s the demographic that you are hoping to attract; transitioning neighborhoods; and, community zoning. All of these things, when coupled with what may appear to be a prime location, can shift the paradigm of whether or not a location is right for you!
For starters, demographic. This would be anything from the age group to the family makeup of potential buyers. If you’re investing in a community that is rife with nightlife, and adult-centric entertainment, then families are going to be lo to inquire within. So, you would be looking at college-aged tenants, which may mean higher turnover. Or, possibly young executives, that often translates into higher end finishes and amenities. If you are not prepared to make those types of upgrades or deal with an annual exodus and new search for tenants, however prime the location be—increase in property value, ample selection pool, etc.—this type of location may not be suited to your needs.
Secondly, would be the factor of a neighborhood in transition. Transitioning, in real estate, of course relates to change in type of community. From college to single-family, from single-family to college, but mainly transitioning is used in reference to a neighborhood revitalization. This happens when a number of factors makes a run down, typically less than desirable area has had life breathed into it by means of businesses and attractions. As these things find their way into those communities, the housing in the area increases in value, desirability and status. Knowing what that means for a potential investment, could mean an immediate increase in your property’s value, what you can lease for, and the overall long-term success of the investment.
Finally, would be the aspect of zoning. Without knowledge of current zoning, pending zoning changes, or the potential for changes you can dramatically affect your investment’s bottom line as it relates the question of location. For example, you buy a large property that can easily be made into two units. They will be large enough for two families to occupy it, which is great because there are excellent schools, parks, and family restaurants. Perfect, right? You’ve found the perfect area for families, and a property that will garner you two excellent lease payments. However, while doing the construction, the inspector informs your contractor that the area is not zoned for multiple family dwellings. Now, your perfect location, the amount of your initial investment, and the amount of the construction that is already in progress is in question because of zoning, which was not part of your “location, location, location” equation.
Whew! Seems like too much to grasp, doesn’t it? “Buy an investment property” they say. “Financial security,” they advise. “Big risk, big reward,” right? It doesn’t have to be that big of a risk. Before you hire the right builders, the perfect contractors and the like, hire the best realtors! With the right information and the right people working with and for you, everything you’ve been told will be true. You can buy your investment property, secure your financial future, and be rewarded handsomely for the risk you take by making the best choice of all, calling Carod Properties, where we epitomize “professionalism in the spirit of excellence!”
