Real estate investment is an excellent way of earning passive income and building wealth.
Now, real estate investments are no walks in the park, much like other investment methods. They require extensive preparation and research to push through successfully.
Without either, you risk losing the money you invest in specific properties.
Understanding the Role that Location Plays in Real Estate
It’s worth noting that you have to consider many working parts when investing in real estate. Working with a property manager lightens the burden, but it’s still crucial that you know what you’re getting into.
Among the many elements you need to track, the location plays a starring role regardless of whether you’re investing in residential or commercial real estate. After all, the location often drives the price of properties. It also affects other factors, such as rentability.
In addition, there are other factors tied to location, such as vacancies and real estate listings. Here’s what you need to know about these two factors.
Analyzing Vacancies and Real Estate Listings in Certain Locations
An experienced property manager can assist you in analyzing locations to figure out if they are worth investing in. Below, the article will discuss different scenarios to help you better grasp vacancy and real estate listing analysis.
Seasonal Locations
The vacancies and real estate listings in your chosen location can give you a better idea of the market and community in the area. Let’s set the scene.
The place you’re eyeing has numerous rental listings during the summer, and there are several schools and universities in the area.
Your first impression might be that the area is experiencing a downturn, but it’s more likely that the location is seasonal—students and academics come and go with the months.
Declining Community
On the other hand, numerous vacancies and rental listings may mean a declining community. Several factors can cause this, including but not limited to higher crime rates, closing businesses, and lesser city resources.
While the properties here may be a bit more affordable, especially the foreclosed homes, you may be better off looking elsewhere.
Declining communities often turn away potential house buyers and renters, and you may end up acquiring a property that sits around for months on end.
Class A Neighborhood
Neighborhoods that are more established and better cared for tend to have fewer vacancies and more rental listings.
These types of neighborhood properties attract improved amenities and city improvements, which in turn entice more people.
However, it would be best to keep in mind that well-off neighborhoods may be more challenging to maintain in the long run due to high expenses. The competition may be stiffer, too, so you may need to invest more time and money to stand out from the competition.
Utilizing Vacancy and Real Estate Listing Data
Property managers often use vacancy and real estate listing data to determine the price for certain properties. Since you better understand this data, you can also make more informed decisions regarding potential investments.
For example, fewer vacancies in the area mean the area is highly sought after. Landlords can raise the rent, and people will still flock to the location. However, the maintenance fees may not be worth it in the long run.
On the flip side, more vacancies and listings may indicate that the area is suffering from a decline. In this scenario, you may be better off looking for a different location, given the possibility that you can’t flip a property and sell it immediately.
Conclusion
If you haven’t figured it out by now, the location plays a huge role in the success of your real estate investments. Therefore, it’s critical to have an experienced property manager to help you analyze the local market and surroundings.
Additionally, you must keep track of the vacancies and listings in your chosen location. It will help you create a well-informed decision before investing in a real estate property.
Orlando REO Professional is a firm that offers property management in Clermont, FL. We have experience working with various real estate properties, including rentals and REOs. Check out our rental listings or give us a call at 407-704-6924 today!