City vs Suburbs: 6 Tips For Deciding Where To Purchase Your Next Investment Property
by Arina Smith Real Estate 19 October 2021
Investing in property demands educated decisions. There are no whims when purchasing a property as an investment, and one of the critical questions is: where? You will find benefits to investing in a city-based property but just as many upsides to investing in the suburbs. So, which is the better investment?
It’s advisable to contact a property investment advisor when making these decisions to maximize your potential profits. However, understanding the determining factors will allow you to develop a keen sense of direction when it comes to your investment choices.
1. Consider the Budget
With many properties on the market, having a clearly defined budget will give you a more compact range of properties to filter and search through. The budget will impact the location of the property too. For example, after creating a set budget, some suburbs will be eliminated immediately. An investor’s budget will also allow for a clearer understanding of the different cities you could consider.
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2. Know Your Goals
Are you planning on renting out your property, living in it, fixing it up, and flipping it? Some investors don’t know the answer to this question until renovations are underway. However, it’s important to know what direction you want to go in with this investment before you invest.
Certain areas lend themselves to certain living arrangements. For example, some suburbs attract plenty of people looking to buy but few people wanting to rent. So, if there’s a chance you might want to rent out your property, you need to know whether you’re in the right place to do so.
3. Explore Your Target Market
Being a property investor demands the same level of knowledge of the target market as an entrepreneur or business owner. While the properties an investor may purchase could vary, it’s easier to determine the perfect buyer or tenant for you. Defining your target market (while reflecting on the budget as mentioned in the first tip) will help you assess the most likely properties to attract such a person or family.
4. Meet Locals
One of the best ways to decide the location of your next investment property is to go out into the areas yourself. Get a feel for what each location has to offer. It’s always helpful to ask the locals why they love living there. This can provide deep insight into the type of residents linked to a location. Look for any patterns that emerge after you ask a range of people.
5. Determine the Transportation Situation
Public transport is a critical factor when pricing a property. How easy would it be to commute to various locations? What are the methods of transportation available? Trains, accessible roads, and busses will either help or hinder the profit an investor can earn. So, research transport carefully in both the cities (often excellent) and the suburbs (which may not be as consistently reliable).
6. Are Schools Important? You Bet
This becomes more relevant if the investor is planning on selling the property after renovation. It’s more likely that homeowners will be looking to start a family – if they don’t already have a family – after purchasing a home. As such, it’s essential to consider the schools around the area and their reputations. Again, this all links back to knowing the ideal buyer for the property.
The truth is, there is no “correct” answer to the city vs suburbs debate. Consider the factors listed above, and then settle on the best location for your budget and needs.