When you are buying an investment property, you know to look at the numbers. You take the heart out of it, and it all comes down to the dollars and cents. Which is the way it’s supposed to be. You look at a the local stats for the area, look at any developments that may be happening on the books and look at the neighborhood. Is there anything else you should be looking at?
Well yes – there always seems to be something else to consider. These are some things that experienced investors look for that may not be top of mind initially, but can make a big difference down the road.
The Friendly Meth Lab
Unfortunately there are more and more drug house popping up across the country. How do you avoid buying an investment property that is on the same block or next door to a Meth Lab? Meth labs are often set up in the nice looking house, that no one would suspect, so it can be difficult to avoid.
You can’t predict what will happen in the future, all you can look at is how stable a neighborhood is, and hope that that continues. If you have a strong community with a good school in the area, most houses are owned and lived in, then there is less chance for something illegal popping up. As there are too many people invested in the well being of the neighbourhood.
The hub of most neighborhoods is the local school(s). If you have a solid school that has a good roll and the principal is upstanding and respected in the community, then it is very likely that the school will either grow or it will remain stable. This is what you want. Be wary of a school where their roll is falling and there is a high turn over in staff. Staff turn over and a falling roll are indicators that the school is not as stable as you would like. If a school is not stable, then community around it is not as invested and that can lead to a less desirable neighborhood. So look closely at the school(s).
The Local Governing Body
What is happening in the local government? What noises are they making? Are they looking to increase housing in the area because of increased population numbers? Are they looking at changing how they collect the rubbish and in turn how much they are going to charge? Are they looking at changing the zoning of the area? What are the rumblings of the next 5-10 years?
Now think what would happen to your rental property if all those rumblings happened? Would your property value go up or down? Would it mean more expenses for you and in turn less of a profit? Or conversely would it mean wonderful things for the community and your property?
Of course we can’t think of every single scenario, but we can be aware of more than just the numbers. It’s all about thinking long-term, not just about the value of your property, but about the community that it resides in. You need to pay attention and not just buy it and forget it. Property investing is a hands on activity, you need to keep a watchful eye on things.
What do you think, what’s something to keep an eye on that you may not have initially thought about?