Location is important in the field of real estate investing. Investors will have to adjust their strategies based on how local markets are performing.
It’s a no-brainer that healthy local markets offer opportunities, so it makes sense for investors to move into these areas and leverage the positive fundamentals.
All it takes is extensive research, which is something I often do. In this business, it’s important to keep your ears on the ground and monitor the field for any new developments.
For me, the top three indicators of a healthy local market are safety, access to education, and employment availability.
Why? They all involve livability. People are drawn to places offering a simpler and easier life. This should inform your investment strategy as well. You know you’ve hit the jackpot when you find a market with a high livability index. This makes it easier for you to maintain a decent vacancy rate since the demand for apartment spaces is on a constant rise.
I found this interesting slideshow on US News that should help you get an idea on where to invest.
However, finding a highly livable town or city is simply not enough to generate high cash flow. You also have to make sure your asset is adequately prepped up through rehabilitation projects that allow you to secure higher returns.
You want the property itself to be livable, so you might as well consider replacing your lighting fixtures and improving your bathroom amenities before you show the units to prospective tenants. That way, they’d be more motivated to rent out.
If you’re not sure where to start, here are a few suggestions:
Outdated appliances consume too much energy and, on top of that, are unable to give the satisfaction that your tenants expect. Replacing this with modern appliances with advanced features will help you keep your tenants happy and improve the lifestyles they lead.
Brighten up your units by upgrading your lighting fixtures. Install mini-chandeliers or accent lights to capture the right mood for your tenants.
Replace your flooring
Has the property’s flooring been around for more than then years? If it’s hardwood, then you might as well consider replacing it with new material such as vinyl. This will upgrade your property’s appearance, improve client satisfaction, and increase the value of the asset.
By focusing on livability, investors are able to deliver quality to people who are renting out. Livable communities create opportunity, but it’s a livable asset that drives cash flow.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
Stay tuned for next week’s newsletter!
How to make your properties livable?
- New appliances
- Improved lighting
- Replace your floor
How do I know which upgrades or improvements to make?
Research your local rental market and consider what features and amenities are most in demand. Additionally, ask for feedback from current and potential tenants.
How often should I clean my rental property?
It’s recommended to clean the property thoroughly between each tenant and conduct regular deep cleanings throughout the year.