What Are the Indicators of A Good Investment Location?
Live where you like but invest where you can make money.
Choosing a good investment location is critical. Below are some indicators that you can use to narrow you search.
- Major employers are doing well and in market segments expected to grow. This indicates that your target tenant pool size will likely increase and will likely remain employed. No jobs, no rent.
- New companies setting up operations in the area. Contributes to job growth and polulation growth.
- Sustained Population growth. Critical for demand. When demand increases, so does property value and rents.
- Urban sprawl limitations. When there is limited space to expand, the only growth path is redevelopment. This almost ensures that property and rental prices will rise.
- Per capita income growth. As per capita income increases, so does the rent your target tenant pool will be able to pay.
- Low Taxes - efficient and non-intrusive government. This means you get to keep more money in your pocket.
- Landlord-friendly property laws and regulations. No rent control, efficient and low cost evictions, etc. will make your business risks low.
- Low insurance cost. This indicates that the property damage risks are low.
For more information on evaluating an investment location, please see -
- Criteria for Selecting A Good Investment Location (5 min read)
- Location Considerations - Do Not Forget Jobs
- Obtaining In-depth Local Knowledge (4 min read)