Choosing a quality investment property location is the key to success
There are a number of key factors to consider when buying a property. One of the most critical of these is the location. However, more importantly are the planned use and target market which will drive the key location considerations discussed here. For example, a property purchase intended as a family home versus a buy to let property intended for the commuter rental market, would warrant a very different set of priorities when it comes to any investment property location decisions.
Country vs City
Whether purchasing as a home or as a rental opportunity, the appeal of both a tranquil, rural setting as well as a buzzing city surrounding, is understandable.
However it is important to consider this appeal in the context of the target market when looking at a buy to let purchase. Although individual tastes definitely differ, ensuring the location appeals to the majority of the target market, will maximise rental potential and hence profits. Although the below guidelines may appear to be generalising slightly, this will give an idea of the location focus for the different target markets:
- Families – May prefer a quieter setting with less traffic, close to schools, amenities, friends & family
- Executive Commuters – In many cases will prioritise convenience and hence may opt for a city location close to the rail transport facilities
- Couples – This will vary greatly from couple to couple, but access to local amenities, parking and a private garden should be prioritised whether a city or more rural location is opted for.
- Students – A city location close to bars, libraries, internet café’s etc, would appeal to the majority of the student market however this may be more appropriate when considering a larger property with multiple rooms to let.
Luckily, when it comes to purchasing a home, it really comes down to personal taste. Most individuals, families & couples will have a preference to either a country or a city setting. Locations based in a rural setting but with a short journey into the city, can give the best of both worlds but whatever the dream, considering distance to amenities such as local shops, doctors surgery, dentists, transport and where appropriate, schools, is fundamental.
Distance from Family
Of course considering the location of those important to us, is important. In fact, this may, in some circumstances, be more important than the dream location. Convenience, practicality and being close to those we love is quite often more important than the perfect setting itself. Where this is the case, marking out an area which is within the required distance from friends/family will ensure any property search is focused and where possible, encompasses both the ideal location with the practicalities or need to be close to loved ones. If you happen to come across the perfect property but it is outside of the required distance, then you could always consider letting using Landlord services.
Distance from Work
In many cases, an individual’s work base drives the location requirement more than any other factor. Where convenience and time are of paramount importance, this is often at the sacrifice of the ideal location but is often a temporary solution and viewed as a stepping stone to the perfect location.
When scouting for that prefect renovation property, the proximity of your neighbours may be high on your priority list as you may not want to have neighbours just a few feet away. If you opt for a town or city location then your space options are likely to by quite limited due to the natural urban habitat. However choosing the countryside will probably give you more freedom of space as rural locations tend to have this is abundance.
Another point to consider is that you will be carrying out substantial renovations on the property over the coming months. It might be worth visiting your new neighbours to introduce yourself along with taking a freshly baked cake and a bottle of wine or 2. This should hopefully bring your neighbours onside when you tell them that there could be a little noise for the next few months while some building works is carried out.
Setting the budget early on is critical. This, in many cases will determine the location options available. For example, a family wishing to relocate into a rural location but with a limited budget may need to down-size or move further north to achieve the ideal setting. When buying to let, consider rental prices versus mortgage payments. Buying to let should not be an emotional purchase. It is purely a business and as such, maximizing profit is key. Identify the target market, type of property and rental opportunities, then set a budget and ensure that any purchase price (including renovation costs), does not exceed this level.
As a general rule, properties in rural locations tend to be higher in price but this is not always the case and great opportunities to purchase properties at a discount for a number of reasons may allow that dream location to be a reality!
To get the process under way, start off by creating a list of requirements and follow it rigidly as this will help to ensure you choose the right investment property location.