How do you determine if a neighborhood/area is good to purchase a rental property?

11 Replies

@Alberto Leon  

I've heard real estate is about location, location, location! I would say any property that is close to things that are desirable is a good rental property.  I would also say that the higher the walk score the better the rental. 

https://www.walkscore.com/

Thanks @erica croonenberghs. You are 100% correct and thank your for the link to walk score. Are there any other criteria that you look at before selecting a neighborhood to invest in? 

I like to look in neighborhoods my family could live in and still feel safe. Sometimes driving through neighborhoods during the day and nigjt , morning and afternoon and just seeing what the place is like. If you feel like you need a gun when you are there, probably a place to avoid

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I look at this site to look at the income and crime rates. It gives you a good number of other statistics too - 

http://www3.onboardnavigator.com/1.5/WebContent/OB...

Try this web site. http://www.neighborhoodscout.com/ . It is quite helpful.

(919) 434-3132

Great information here.

Are you looking for data siurces (such as city-data and neighborhoodscout), or are you looking for a list of criteria to use in evaluating neighborhoods?

Let's do the latter. Quality of schools, crime rate, median household income, tax rate for property, tax rate for tenant's income, ratio of rent vs purchase price, proximity to employment, proximity to shopping, proximity to public transit - that's just a partial list, and in some areas some of those are less relevant. 

@Alberto Leon . In addition to the other excellent points mentioned above, I would also add that you should keep in mind the governmental influences in place by not just the state but also your municipality. And by that I mean to take a close look at the city's official plan that has been developed to see what and where the growth objectives are.

Also try to get in contact with the economic development office and see how willing they are to provide information as that can be an indicator of how forward-looking they are. 

All the best! 

@Erika Croonenberghs I live in a really nice neighborhood, bad for rentals numbers wouldn't pencil out, but great to live in. I want to walkscore.com for the first time and got a walk score of 0. One of my rentals that is in the worst area got a walk score of 58. What the heck? So is high bad and low good? Haha

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