Your property’s location is everything. Location can determine the future success or failure of your investment, so where you choose to invest in property is one of the most important decisions you can make.
No pressure, right?
Don’t worry, choosing the right location isn’t an impossible challenge if you keep your mind focused on one thing — value. The right location is where you can get the most return for your money. You’ll also find the best value in the ratio of purchase price to monthly rent. Basically, you’ll want to find a property that earns enough rental income to justify the purchase price.
Often you’ll find that high priced homes in popular areas won’t actually make you enough in rental income to substantiate what you paid for the property. For example, Plano is a very popular area right now, and with Toyota’s new campus coming in 2017, it looks as though 4,000 employees minimum will be moving to the area. While it seems like the upcoming demand should cause values to increase, it doesn’t mean you can’t get a better return on a rental property elsewhere.
Don’t Follow the Hype
It’s understandable why some investors follow buzz. An area that garners a lot of attention seems appealing to renters and feels like an opportunity where you can cash in — but you shouldn’t act on impulse.
What may be the “talk of the town” right now might not be trendy in a few years. Your rental property is a long term investment. Make sure whatever property you settle on is in a location that will be desirable in the foreseeable future. Ultimately, you should be cautious of hype unless there’s true value to back it up.
The Key to Finding the Best Location
We’ve found the most successful properties are located in areas with plenty of amenities. Start searching in newer neighborhoods, as most of them have pools, parks, bike trails, community centers and close access to highways. Renters flock to neighborhoods with these convenient perks. They’ll also add resale value to your investments.
Northwest Fort Worth in Tarrant County, for example, has newer developments with top-notch amenities you should consider. The area also has a new high school and hospital, both of them top-rated, which can be major dealmakers for future tenants.
Should You Avoid “Hip” Locations Altogether?
Don’t rule out popular areas, but keep your options open. You can miss out on opportunities when you simply follow the crowd.
However, if you find a low-cost property in a trending area where you’re guaranteed to earn a decent return from rental income, go for it. Just make sure that hype isn’t the main reason you decide to invest. You shouldn’t make a purchase based on speculation alone.
Need help choosing a DFW investment property? Give us a call.