When you are buying an investment property, you know to look at the numbers. 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.What else should you be looking at?
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.
What kind of neighbourhood are you looking to invest in? No one can predict what will happen in the future, all we can look at is how stable a neighborhood is, and hope that continues. If you have a strong community with a good school in the area, chances are it will stay that way.
The hub of most neighborhoods is the local school. If you have a solid school that has a good roll and the principal is 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 turnover in staff. Staff turnover 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 local school.
The Local Governing Body
What is happening in the local government? 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 is their 5-10 year plan?
Now think what would happen to your rental property if those plans eventuated? 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 plan for 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 and you need to keep a watchful eye and an open mind about what is going on in the greater community.
What other things do you think about when buying an investment property?