One of the toughest decisions a real estate investor might face involves finding the perfect location for a new build investment property. Unlike existing homes, which can turn a profit regardless of the neighborhood in which they are located, you can start from scratch with a new build, so it’s best to choose wisely from the start. Here are some important considerations for picking the perfect location.
The Local Economy
Before you decide to build a home on a vacant lot, you will want to be sure you can sell the new construction home or attract the right renters. The local economy is a big player in this, so doing a little research can make a huge difference. Otherwise, you may not be able to turn a profit at all. What is the job market like? How far do people in the neighborhood tend to commute? What are local sales taxes like? How much are property taxes? What is the average income in the neighborhood or subdivision? The answers to these questions can ultimately help you decide whether you can attract the right buyer.
Another important consideration prior to building a home, condo, or apartment building is the crime rate in the local area. It’s important to consider the crime rate in the neighborhood or subdivision and not the city or town as a whole; sometimes, crime may be nonexistent in one part of town but significant in another. Some crimes will likely always exist, but if violent crimes take place often in the area where you want to build, it may be better to look elsewhere. Otherwise, you may be unable to find people willing to pay a fair price.
Whether you’re building a home or an apartment building, it’s also helpful to consider the schools in the local area – both public and private. Many Americans rely on public schooling for their children’s education, so do a little research to learn more about the teachers, the programs that are available, high school graduation rates, field trips and opportunities, and more. Parents will look into this information before they pay you for a property, so be sure to build in an area with excellent schools wherever possible.
Shopping and Other Activities
Some homeowners prefer to live out in the countryside far away from their neighbors, but others enjoy the closeness of a traditional urban or suburban neighborhood. If you will build a home or apartment building in an urban setting, look at the various activities and shopping nearby. Is there a grocery store within walking or biking distance? Is there a gym or other similar facility nearby? Are there childcare centers close to the property? Convenience can make it much easier to sell a home once it’s been built, so do your research ahead of time.
Building a home, condo, apartment building, or any other investment property can be exciting, and it provides an excellent opportunity to turn a profit, too. Before committing to a plot and breaking ground, make sure that you understand the location as thoroughly as possible. Ultimately, the location will determine the price you can ask or the rent you can charge.