In places like Rochester, NY, property investment is becoming a popular and potentially very lucrative way to build wealth. But anyone considering dipping their toes into this market should be well aware that there are also pitfalls and challenges that come along with the rewards. One of the most crucial factors when choosing a house or apartment to purchase with a view to renting it out in a financially viable way, is its location. In fact, the old saying “location, location, location” pretty much covers the top three considerations.
Here at Torres Turn Key, we’re experts on Rochester, NY, property investment. We know the area like the back of our hands and, over our many years of experience, we’ve pinpointed the sorts of things that might (and should) affect your decision to purchase a property in a particular location.
Remember: choosing the right location can be the difference between some serious growth potential in your investment, and possible financial disaster.
What to Look for in a Potential Location
Choosing a location that is experiencing strong increases in population is essential, because this also means there’ll be a sustained demand for rental properties. However, a caveat to that is that it’s not wise to invest in an area that relies on a single industry (like car manufacturing or mining, for example), because if that industry fails, the population (and therefore the demand for rentals) will plummet. That’s why it’s wise to choose a diverse and dynamic place like Rochester, NY. Property investment is growing here, because there’s a constant and burgeoning population, and multiple industries that sustain the city’s growth.
Things like low unemployment and a strong employment market (with higher incomes and diverse industries) are very important markers that attract people to an area. This, in turn, drives population growth, which then increases the demand for quality rental properties that can demand higher rents.
Amenities, Infrastructure, Future Development
These three things are all interconnected and it’s important to look at not only the current infrastructure in place – public transport, access to major connecting roads, public facilities – but also what’s planned for the future. You should look at proposed infrastructure projects, shopping centers, train stations, power stations, possible zoning and law changes, and revitalization. These factors can all affect values and are also what people look at when looking to move to a new area and rent.
Access to Hospitals and Schools
Access to healthcare and education is usually a high priority for people looking to move to a new place, so being close to schools and hospitals can be a huge advantage when it comes to choosing an investment property.
While what constitutes a ‘good’ neighborhood can be somewhat subjective, even in a place like Rochester, NY, property investment success generally relies on choosing an area that’s safe (low crime rates), has a good range of amenities (like supermarkets, parks, cultural attractions), and access to the aforementioned schools and healthcare. Purchasing in a good neighborhood will not only attract good quality renters, it will also ensure your property’s capital value increases over time.
Supply and Demand
As a general rule of thumb (including in Rochester, NY) property investment in areas with low or limited supply and high demand make a great choice. It makes sense that where demand for properties outstrips supply, values (and rents) will increase, and vice versa.
Attractive Rental Yield
The term ‘rental yield’ simply means calculating your rental income and offsetting it against the cost of the property. If you don’t have a particular property in your sights to work out the rental yield (and this is where, as experts in Rochester, NY, property investment, we can help), you should find out the median house price for the area and divide it by the median rent price.
Historical Trends and the Local Market
It’s wise to seek out professional advice before making a huge financial decision like this, but at the very least, in the first instance you should look at market stability, past property prices in the area (to be able to make an informed inquiry on possible future market trends), and past inventory levels. (The ‘supply and demand’ factor.) Seek out information on rental vacancy rates, and the kind of properties that are offered for sale in the local area (whether they’re mostly commercial, residential, or mixed use).
Government Policies, Regulations, Property Taxes
Every local government has its own set of laws and legislation, so it’s important to research and understand the ramifications of those in the area in which you’re considering purchasing. Things like property taxes and rent control laws can have a major impact on the profits you make from rental income.
Only Fools Rush In
For anyone thinking about purchasing in Rochester, NY, property investment has never been more appealing. But while location is clearly a major factor in your decision, it isn’t the only one, so it’s vital that you don’t rush in without looking at the overall bigger picture. For instance, the condition, size and quality of the house can make a huge difference to the rental yield and the quality of the tenant you attract. You also need to consider your individual financial situation, your investment goals and strategies and your risk tolerance factor (this is a very important one).
Experts Who Deliver
Here at Torres Turn Key, our experienced and dedicated team has been advising clients for many years when it comes to Rochester NY property investment. We have a deep insight into the local market, and we are dedicated to providing a comprehensive, honest and superior service to our clients to help meet their needs.
If you’re considering purchasing a property in the wonderful city of Rochester with a view to renting it out, please feel free to get in touch with one of our friendly team. We can help you make the most of your investment and achieve your financial goals.