Your criteria for considering a location for your real estate investment should be the same as if you were purchasing the real estate for yourself, as opposed to an investor. Remember that you’re intention is to turn around and sell (or lease) this property. Although an affordable purchase price might initially attract you, remember that your future buyer will be thinking about so much more than price. Your buyer will be living, or running their business in the neighborhood and will be taking certain criteria into account when considering purchasing or leasing your property. As the investor, you need to consider these criteria as well BEFORE you make your investment.
In residential real estate, a potential buyer is going to look for the property’s proximity to hospitals, doctors offices, schools and shopping. They may consider how close the property is to public transportation options, or how close they are to major highways. When investing in residential real estate, you should consider these things as well. If a property is far off from these destinations, your selling price will be effected, and so should be considered when purchasing the property yourself.
In commercial real estate, a potential buyer or lessee may consider the property’s proximity to other businesses and shopping centers. The daily traffic passing by the location will also be considered. Age of the property and versatility of space is something many potential buyers will consider. A potential buyer will also look at accessibility of the location from major highways and how far away they are from large residential communities. They will also be interested in the average income of the residents in the area. Don’t let these details go undiscovered before investing in commercial real estate.
Whether you’re investing in commercial or residential real estate, it’s important to put yourself in your potential buyers shoes. Do not only consider how attractive the property is to you, as an investor, but consider also how attractive the property will be to a buyer.
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