Every successful real estate investor knows the importance of the location of an investment property. One mistake that beginner property investors fall for is taking the rental property’s purchase price only into consideration before making a real estate investment decision. However, even if you managed to buy the cheapest investment property, it won’t make a good return on investment if it’s located in a bad location! For a successful real estate investing career, property investors must look for the best place to buy investment property.
Since the income property is rooted in its real estate market, the success of this income property relies on the success of the market. To find the best place to buy investment property for a successful and profitable real estate investing career, the real estate investor has to look for certain factors in a location or a real estate market. Keep reading to learn the 3 major factors which property investors should look for to find the best place to buy investment property in the US housing market.
Related: Top 10 Real Estate Markets for Buying Rental Property in 2018
The Best Place to Buy Investment Property – High Occupancy Rates
The goal of every real estate investor is to make money. Property investors make money from the monthly rent which they collect from their tenants. Thus, no matter how good an income property is, it becomes irrelevant if it’s not occupied by tenants. As a result, the first factor to keep an eye on is occupancy rates in the real estate market. The best place to buy investment property has high occupancy rates and low vacancy rates, meaning the income property will remain occupied and generate a profit for the real estate investor.
How can a real estate investor identify real estate markets with high occupancy rates? The first and most obvious factor is the market’s population. Find out how many people live in the area and whether the number is expanding or contracting – a growing population means more demand for real estate investing, which makes the best place to buy investment property simply because more people = a larger pool of tenants. The next factor to watch out for to identify locations with high occupancy rates is the time that investment properties spend on the market and the time it takes to fill a vacant income property. Naturally, the best place to buy investment property is where income properties are rented out quickly.
To find this information regarding a certain real estate market, try contacting real estate agents or property managers in that market. Alternatively, Mashvisor provides property investors with occupancy rates information for any neighborhood in the US housing market to help them to find the best place to buy investment property.
Click here to start searching for the best real estate markets with high occupancy rates!
The Best Place to Buy Investment Property – Offers Job Opportunities
The next factor to watch out for to identify the best place to buy investment property is job and employment opportunities. This is closely related to occupancy rates – real estate markets with growing job opportunities have a growing population as they attract more people. Thus, take a look at the unemployment rate in the real estate market – it is high? Are people having trouble finding jobs? If yes, then it’s best to look for a different market to invest in an income property. Not only does this mean that the real estate investor will have a hard time finding good tenants who are financially stable and able to pay their monthly rent in full, but it also means bad economy and low rental income – which obviously does not make for the best place to buy investment property. One example of real estate markets with both a growing population and job opportunities is the Austin real estate market.
Related: Why Consider Buying an Investment Property in the Austin Real Estate Market?
The Best Place to Buy Investment Property – Diverse Economy
Speaking of economy, the next factor to keep in mind is how diverse the economy is. In other words, what drives the economy? The best place to buy investment property is where the economy is diverse as these real estate markets offer more investment opportunities!
For example, the Orlando real estate market is considered the best place to buy investment property in the US housing market thanks to its diverse economy. The city’s population is growing thanks to the many job opportunities offered to residents (making it a good place for traditional real estate investing). In addition, thanks to the many attractions like Disney World, Universal Orlando Resort, and many more, Orlando is one of the top tourists’ destination in the country (making it great for Airbnb real estate investing).
Related: Why the Orlando Real Estate Market Is the Best for New Investors
As you can tell, a market with diverse economic sectors is something property investors should look for to find the best place to buy investment property.
Secondary Factors for the Best Place to Buy Investment Property
The previously mentioned are the major factors that property investors must look out for to find the best place to buy investment property in the US housing market. There are other – secondary – factors that property investors should bear in mind which are worth mentioning as well. These include the following:
- A lower price-to-rent ratio: In these markets, property investors are able to charge a decent rent and receive a good return on investment no matter how much they paid for the income property.
- Low real estate income property taxes: A real estate investor can even find real estate markets with no tax! Read this article to learn in which state in the US housing market you can invest in real estate with no property taxes.
- The landlord-tenant laws: Naturally, look for real estate laws that are landlord friendly.
- Safe real estate markets with low crime statistics and not prone to natural disasters: Tenants are more attracted to these markets.
How to Find The Best Place to Buy Investment Property?
Successful property investors always perform a real estate market analysis before making an investment decision to buy an income property in a certain real estate market. A real estate market analysis evaluates different locations and real estate markets regarding all the above-mentioned factors to find the best place to buy investment property. Moreover, a real estate market analysis also analyzes the income property itself and estimates its potential rate of return before making the purchase!
Mashvisor provides property investors with the best real estate investing tools to perform a thorough real estate market analysis such as Mashvisor’s investment property calculator and the heatmap. Within minutes, a real estate investor can easily find the best place to buy investment property and analyze different investment properties across the US housing market based on different metrics including rental income, cash on cash return, cap rate, and more! Click here to start analyzing investment properties and to find the best place to buy investment property in the US housing market with Mashvisor!
To guarantee a successful real estate investing career, property investors need to find the best place to buy investment property. Otherwise, no matter how good the income property is, it won’t be as profitable as an income property in an excellent location. Take the above-mentioned factors into account to narrow down locations and find the best real estate market, and then pick an income property within that market. To learn more about all aspects of real estate investing, continue reading our blog.
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