Five Questions to Ask Before Investing in Any Neighborhood

Five Questions to Ask Before Investing in Any Neighborhood

Five Questions to Ask Before Investing in Any Neighborhood


   When considering a property, remember that the house does not exist in a vacuum. The value of the property can vary greatly depending on what’s going on in the local area. Even the most well-kept property can suffer in an undesirable neighborhood, but finding a good deal in an up and coming community can add quite a bit to your investment and cash flow. Here is a quick list of five questions you should answer to make sure that the neighborhood is an asset to your investment


1.  Who lives there now? First, does anyone live there? Too many vacant properties could be a red flag. On the other hand, if you are buying the last home in a vibrant neighborhood you can be confidant that people will want to live in your property.

   Is the neighborhood near a university? Then you will probably be renting to students and deal with regular turnover of tenants and summer vacancies. But if the neighborhood is home to families you might be more confident that your tenants will be more committed to staying for the long term

2.  How do the rents compare? Are they higher than nearby areas? Lower? There may be things that aren’t immediately obvious keeping the rent in an area down. Find out what other properties in the neighborhood are renting for. To find out what other properties and communities are charging for rent you can check sources like: Trulia, RentBits, Rentometer, Zillow, and

   Finding out what other properties in the area are renting for will alert you to any potential problem as well as help you to set your own rent to be competitive.


3.  Are there other things in the vicinity that might attract tenants? Check the potential neighborhood for current or projected parks, malls, gyms, movie theaters, public transport hubs and all the other perks that attract renters. Cities, and sometimes even particular areas of a city, have loads of promotional literature that will give you an idea of where the best blend of public amenities and private property can be found.


4.  What are the Property Taxes? Property taxes are not standard across the board and, as an investor planning to make money from rent, you want to be aware of how much you will be losing to taxes. High property taxes may not always be a bad thing if the neighborhood is an excellent place for long-term tenants, but the two do not necessarily go hand in hand. The town's assessment office will have all the tax information on file or you can talk to homeowners within the community.


5.  What about the future? Neighborhoods change all the time. Be on the lookout for new construction nearby.  New condos or office blocks being built could mean an influx in renters soon. Plans for a new school could bring families to the area. Check with the municipal planning department to find any information on new development that is coming or has been zoned into the area.



Memphis Investment Properties

Address: 4701 Summer Ave
Memphis, TN 38122

Telephone: 901-244-5820

Fax: 901-842-0803