We talk about the importance of location a lot. Anyone involved in real estate and property management is always going to be talking about location.
Choosing the right investment property is foundational to the success of your investment, and the right property is always in the right location. As an investor, you must understand how the location of your rental property will influence your rental income, the type of residents you attract, and the risks you face.
We have a deep understanding of the local Sacramento rental market and all of its unique and diverse neighborhood. Today, we’re discussing the key factors to consider when choosing the right location for your rental property investment.
Neighborhood Demographics and Likely Resident Pool
Before investing in a rental property, it is essential to analyze the demographics of the area. Determine who lives in the location and what their needs and preferences are. Will you likely be renting to families who appreciate the local schools, retirees who are looking for low-maintenance living, or college students likely to move in with roommates? Understanding and analyzing the demographics of the area will help you determine what type of property to invest in and what amenities to provide.
Jobs and Economic Growth
The economic growth of an area is another important factor to consider when choosing an investment property location. Areas with a growing job market and a flourishing economy have a high demand for rental properties. Similarly, areas with a high population growth rate offer great rental opportunities, as more people move into the area, increasing demand for housing options.
Sacramento has been doing pretty well in both population numbers and local economic data. Drill into the analytics and insights coming out of specific neighborhoods so you can get a better idea of what your rental value is likely to be before you buy.
Proximity to Amenities and Conveniences
A valuable rental property located close to essential amenities, such as schools, hospitals, shopping centers, and public transportation. Good local grocery stores and parks will provide more demand among residents. This contributes to higher rental income.
When selecting a rental property location, consider the proximity to amenities that your residents will appreciate, such as entertainment spots, restaurants, and recreational areas.
Location and Sacramento Property Pricing
When considering the perfect location for your rental property investment, keep in mind that the cost of purchasing the property also matters. You will spend more money to invest in a property that’s in an upscale area, but you’ll also count on higher rents. If your strategy is to buy and hold for the long term, waiting on positive cash flow is not such a big deal. But, if you are less concerned with appreciation and more interested in your immediate cash flow, you’ll want to look for different properties in different areas. Your budget and investment goals will easily drive the location options available to you.
Choosing the right location is critical for successful rental property investment. Understanding the demographics of the area, job growth, proximity to essential amenities, and the cost of purchasing the property are all important factors to consider when making your selection.
Consult with a local property manager, who can provide the data and analysis you need of different locations and neighborhoods. We’re here to provide resources and support. Contact our team at PURE Property Management, and we’ll help you find a well-located Sacramento investment property.