Factors of a Good Location for Buying/Renting a Property

When it comes to real estate, the old adage "location, location, location" holds true. Whether you’re searching for a new home to rent, investing in a rental property, or looking for a primary residence to purchase, the property’s location is a crucial factor to consider.

Why? Because a great location can drive up property value, attract the right residents, and offer a solid return on investment. But what exactly makes a location “good”? Let’s explore the key criteria you should consider as a buyer or renter searching for your next property.

Neighborhood Quality, Safety, and Noise Considerations

It may seem obvious, but the neighborhood a rental property is in plays a significant role in that property's desirability. Before buying or renting, consider the following:

• Safety: Low crime rates make an area more attractive to buyers and residents. Research local crime statistics to ensure the neighborhood is safe.

• Community Appeal: A well-maintained neighborhood with green spaces, clean streets, and active community engagement is a plus.

• Noise Levels: While some areas near schools or busy streets may be convenient, excessive noise from airports, train tracks, or busy streets and highways can be a drawback.

To gauge the overall quality of a neighborhood, visit at different times of the day. Drive through the neighborhood and explore on foot. This allows you to assess noise and traffic levels, street activity, and the overall feel of the neighborhood during the day and night.

Amenities and Recreation

Beyond its immediate neighborhood, a property’s surroundings impact its value and desirability. Consider:

• Proximity to restaurants, shopping centers, and entertainment options such as movie theaters.

• Access to highly-rated healthcare facilities and fitness centers.

• Recreational spaces such as parks and hiking trails.

Rental properties with scenic views or easy access to water tend to appreciate faster and be more attractive to residents. Even if you’re not personally drawn to these amenities, they can be strong selling points.

School District and Educational Facilities

Even if you don’t have school-aged children, you should consider the quality of nearby schools in any property you plan to purchase. Homes in highly rated school districts tend to hold their value better and appreciate faster than those in lower-rated districts.

For rental property investors, areas with strong schools are in high demand among families, making it easier to attract long-term residents. Research school rankings, graduation rates, and overall district performance before committing to a property.

Accessibility and Transportation

Convenience matters when it comes to the majority of residents. A property with easy access to major roads, public transportation, and employment hubs will always be in demand. Things to consider when assessing a rental property’s accessibility include:

• Proximity to public transit: Cities with reliable bus, subway, or train systems tend to be more attractive.

• Highway access: Being near major highways without being too close (to avoid excessive noise) is ideal.

• Commute times: A long and stressful commute can be a deal-breaker for many homebuyers and renters.

Walkability and bike-friendly infrastructure also add value, especially in urban settings where people prefer alternatives to driving to avoid getting stuck in traffic.

Local Rental Demand and Vacancy Rates

For those investing in a rental property, understanding the state of the local rental market is incredibly valuable. When researching a potential location, reach out to property management professionals or use online tools to assess a few key criteria such as:

• Vacancy rates: A high demand for rentals means you’re less likely to have prolonged vacancies (provided your rental property is desirable).

• Rental yield: The ratio between purchase price and rental income should be favorable.

• Resident demographics: A mix of professionals, students, and families ensures long-term rental stability because your property will be available to a range of potential residents.

Development and Infrastructure Growth

An area’s potential for growth can make or break a real estate investment. New developments such as schools, shopping centers, public transit expansions, community improvement projects, or business hubs, draw interest and signal long-term desirability for an area.

To research development and infrastructure plans, you can:

• Check city planning websites: Many municipalities share zoning maps, future development plans, and infrastructure updates online.

• Attend local government meetings: City council or planning commission meetings often discuss upcoming projects and community improvements.

• Talk to local real estate agents or property managers: These professionals are typically familiar with growth trends and plans in the area.

Understanding the growth trajectory of an area allows you to future-proof your investment property to a degree. While it’s impossible to predict the future, new development usually signals an upswing in popularity and appeal for residents.

Cost of Living and Affordability

A property’s price should align with its potential return. When evaluating a property’s affordability, it’s important to consider:

• Property taxes: High property taxes can eat into the profits of your investment property.

• Insurance costs: Many locations are experiencing a sharp increase in home insurance premium costs due to climate-related events and rates can vary from county to county.

• Living expenses: The cost of groceries, utilities, and everyday essentials also vary widely and can influence whether an area is deemed desirable.

Economic Stability and Job Market

A strong local economy is a major indicator of a good location. When an area has a diverse job market and a low unemployment rate, it tends to attract more people, increasing demand for housing. Cities with flourishing industries and a rising population often benefit from consistent property appreciation.

For those purchasing an investment property, a stable job market means a steady stream of potential residents. In your search, look for areas with new business developments, a growing employment sector, and strong wage growth. These signs indicate that the local economy is more likely to support long-term demand for housing.

The Lot vs. The House

When evaluating a property, it’s common to overlook the lot a home sits on. While a house can be renovated, expanded, or rebuilt, the land it sits on won’t change. We like to bring this up because counter to popular assumption, a larger lot in a favorable location with a less desirable home is often a better investment than a more desirable home on a small lot in a less favorable area.

It’s important to think long-term when evaluating a property as a whole. Oddly shaped homes or tiny, crowded lots are not top of the list for many buyers and renters but extra space offers potential and is more likely to appreciate quickly.

Final Thoughts: Factors of a Good Location for Buying/Renting a Property

The location of a property is just as important, if not more so, than the property itself. Whether you're buying a home, renting, or investing in real estate, choosing the right location can make all the difference.

Before purchasing a property, do your due diligence and consult experts for guidance along the way. Companies, like Evernest, are built to help you find the right property and make it work for you.

Find an investor-friendly agent in your area and get started today!