Analyzing Neighborhoods for investing
Member since 2023 · 5 posts · 3 votes
Analyzing Neighborhoods for investing
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Real Estate Broker · Reno, NV · Member since 2023 · 267 posts · 297 votes
3yFor multifamily (1br to 2br) schools aren’t that important. Typically the tenants won’t have children.
For houses it’s more important. I would analyze neighborhoods based on your investing goals. To me in any market the best neighborhoods are the working class neighborhoods where employment is accessible and nearby. And the market is stable. Properties in this area may need work and may not look the prettiest. But that’s where you as an investor add the greatest value. Fixing a home in an “ok” area because more than likely you got that property for a great price. IMO look for the “fringe” areas for investments.
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- Real Estate Broker · Reno, NV · Member since 2023 · 267 posts · 297 votes3y
For multifamily (1br to 2br) schools aren’t that important. Typically the tenants won’t have children.
For houses it’s more important. I would analyze neighborhoods based on your investing goals. To me in any market the best neighborhoods are the working class neighborhoods where employment is accessible and nearby. And the market is stable. Properties in this area may need work and may not look the prettiest. But that’s where you as an investor add the greatest value. Fixing a home in an “ok” area because more than likely you got that property for a great price. IMO look for the “fringe” areas for investments. - 3yJustin BrickmanBusiness MemberRealtor · San Antonio, TX · Member since 2021 · 502 posts · 274 votes
Try to find out city plans for the area in the upcoming 6-12 months. If any big tech companies, giant fast food chains, shopping centers are in the near future, that will tell you all you need to know.
Justin Brickman Realty4.9137 Reviews - New to Real Estate · San Antonio, TX · Member since 2021 · 110 posts · 58 votes3y
Welcome to Bigger Pockets! Analyzing a neighborhood or area of a city is a critical step in determining whether a long-term rental property will be a profitable investment. Here are a few methods for analyzing a neighborhood:
- Research online: Look up the neighborhood's crime rates, school ratings, and average home values. Websites like Zillow, Redfin, and Trulia can provide useful data to help you assess the neighborhood's desirability.
- Check out the area in person: Spend some time in the neighborhood and observe the community. Are the homes and lawns well-maintained? Are there parks and community spaces? Do you see families with young children or mostly young professionals? These observations can give you a better sense of the neighborhood's demographics and overall condition.
- Talk to local experts: Local real estate agents and property managers are often the best sources of information about a neighborhood. They can tell you about the rental demand, average rental rates, and any upcoming development plans that could affect property values.
- Look for job growth: Areas with strong job growth are typically desirable places to live and can lead to an increased demand for rental properties. Check out local economic development websites and job boards to get a sense of the employment opportunities in the area.
- Consider the location: Think about the neighborhood's proximity to important amenities like shopping, restaurants, and public transportation. Properties that are close to these amenities are often more desirable and can command higher rental rates.
In terms of analyzing a city, you can also consider factors like population growth, crime rates, and the overall economic climate. It's important to do your due diligence and thoroughly research any area you are considering investing in to make an informed decision.
As for finding an affordable lawyer to help you with your previous tenant's case, you may want to ask for recommendations from other investors or landlords in your area. You can also look for legal aid clinics in your area or check with your local bar association for pro bono or reduced fee legal services.
Quote from @Scott Francis:
This is my first post, so forgive me if this has been discussed perviously. I know the neighborhoods and schools are important when considering a long term rentals. What is the best way to analyze a neighborhood or area of a city.
WRONG, neighborhoods and schools are irrelevant. You are not living there, rentals are a tool to make money, end of story. Keep emotions out of it. I have been doing business in the Cleveland markets for years. I would never live in the areas I sell in, well maybe one or two, but my kids would go private. There is absolutely no way you are going to buy a rental just buy looking on the internet. Waste of time. ALL you need to do is connect with those doing deals, learn then apply what you learn.
All the best
- Member since 2023 · 5 posts · 3 votes3y
Thanks Bob, I’m taking your advice to heart. My thought was a family is more apt to rent a home in a neighborhood with better quality schools. So if you don’t look at these types of things, you’re saying just the money. Is it a good deal
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes3y
I've gone in both directions. My first rental was the SFH I lived in, Class A neighborhood in an Indianapolis suburb, great school district. I bought it in 2013 and started renting it out in 2019 when I moved. The market rate rents have gone up $300 a month since 2020 to 2021. They are the ideal tenants and have a child so want to stay in that school district for a while.
My second Indiana house I recently purchased is a Class C potentially moving up to B - I wouldn't live in this area (will be listed for rent soon so I'll see how it goes). One of my investor friends did bring up if you buy in a high crime area with affordable houses, your quality of tenants won't be as good so that might something to consider.
I'm not sure what city or state you're in but maybe talk to a local real estate agent who works with mostly investors, not primary home buyers, to get their feedback. Good luck!
- Member since 2023 · 5 posts · 3 votes3y
Quote from @Becca F.:
I've gone in both directions. My first rental was the SFH I lived in, Class A neighborhood in an Indianapolis suburb, great school district. I bought it in 2013 and started renting it out in 2019 when I moved. The market rate rents have gone up $300 a month since 2020 to 2021. They are the ideal tenants and have a child so want to stay in that school district for a while.
My second Indiana house I recently purchased is a Class C potentially moving up to B - I wouldn't live in this area (will be listed for rent soon so I'll see how it goes). One of my investor friends did bring up if you buy in a high crime area with affordable houses, your quality of tenants won't be as good so that might something to consider.
I'm not sure what city or state you're in but maybe talk to a local real estate agent who works with mostly investors, not primary home buyers, to get their feedback. Good luck!
- Member since 2023 · 5 posts · 3 votes3y
Becca,
Thanks for the insight, currently looking in the Baton Rouge area, still trying to learn the market and everything that goes into it. It’s certainly can be overwhelming.
- 3yLinda LabbePro MemberInvestor · North Bay, Ontario · Member since 2015 · 709 posts · 263 votes
YOU need boots on the ground all areas have good and bad parts your property management company can direct you to the right place they can provide all kinds of information that you need your real estate agent can let you know what the value of the house will be once its renovated. You cant work anywhere without a great team on the ground
- Other considerations would be flooding, is it located to something undesirable (think garbage dump or jail) or desirable (great restaurants, downtown area), look at how the neighbors maintain their properties and cars, is the area getting nicer over the years. There are a lot of factors, but even if all of them are favorable, you'll see still need to do the math to see if it will cash flow and make sense in the long run.
Quote from @Scott Francis:
This is my first post, so forgive me if this has been discussed perviously. I know the neighborhoods and schools are important when considering a long term rentals. What is the best way to analyze a neighborhood or area of a city.
- 3yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Scott Francis When I started out I rode my bicycle and drove my car around the city. You have to narrow down the search and find the fringe neighborhoods or streets. We don't rely on other people for market research. We do it our self. It's the best way to learn and understand the numbers.
Find a listing that peaks your interest and go look at from the outside. You don't need an agent or an "expert" for market research. Take in the surroundings, look for clues about the neighborhood, and look for signs of INVESTOR ACTIVITY. Go look at SOLD comps within a .5 mile radius. You don't even have to go inside. Just look at the listing photos. You want to see houses being remodeled, nice rentals or BRRRR deals, or city projects coming along the pipeline. Are the roads getting repaired or is it a warzone? These perceived items add value. Do you see cars parked in the yards? Would you live there yourself? I ask these questions every time I walk a property.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Scott Francis:
This is my first post, so forgive me if this has been discussed perviously. I know the neighborhoods and schools are important when considering a long term rentals. What is the best way to analyze a neighborhood or area of a city.
use software, analyze future appreciation for the next five years. See it's easy. But you have to outsource it to software.
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