Sourcing new properties can be one of the hardest parts of real estate investing, but it is a necessary step to find that next profitable investment. However, sometimes it can be difficult determining if the area you are interested in is worth pursuing. You may have found that perfect property, but if the neighborhood is not prime for investing, then you could see your money wasted.
Although you won’t be occupying the property you find, you should choose an area that you would feel comfortable living in. Think in the mindset of your average homeowner or tenant since they are who you will be selling or renting to when the time comes. So whether you are fixing and flipping or interested in becoming a landlord for a rental, here are the top signs of an up-and-coming neighborhood for investing in real estate.
Crime Reports
The crime rate for an area will say a lot about its potential for real estate investing. Areas with high crime rates are not going to be as appealing to buyers or renters, especially ones who wish to raise their families in safe neighborhoods. Check your local crime reports and see what the level of criminal activity has been and for what types of crimes.
Prices Rising
Investors should research what homes have sold for and rented for in the past few years. Typically, rising prices are a great indicator of an area’s increasing value. If sellers or landlords are able to get the higher prices they are asking for, this means people really want to live in this area, so investors should follow where prices have seen a steady increase.
Available Real Estate
Along the same lines, neighborhoods in high demand will see smaller inventory of homes for sale or for rent. If investors want to know if the area they are interested in is worth the investment, examining the number of vacant homes is a good place to start. It is simple: people want to live there, they move in; people don’t like it there, they move out and find housing elsewhere.
Days on the Market
If an area is highly desirable to buyers or renters, the days a home sits on the market should be small. Investors can research what were the average days a property was for sale or for rent in that area and see if that number has slowly shrunk. If homes are going fast, this is an encouraging sign for an area’s potential for positive investing.
Big Businesses
If an area is up and coming and a lucrative investment, odds are bigger companies will also be taking notice. See which are already located there and if any new ones are being built. With these businesses in town, the real estate market will be more appealing to renters and buyers who are interested in the job opportunities and economic growth potential for that area.
Neighborhood Developments
Is the neighborhood putting in a new park for the kids? Are the old streets being repaved? Are houses around the area being renovated? If the neighborhood is seeing some new developments, this is a good sign that the area is worth checking out. Upgrades to older neighborhood features will attract people’s attention. Similarly, if homes are being rehabbed and updated, this is a promising indicator that people want to live there.
If you have found an area that is ready for investing, you’ll need the perfect financing options to go along with that perfect property. Apply for a fix-n-flip or rental loan with LendingOne. Get started today and receive your free instant rate quote.