When choosing a property to invest in, you may consider factors such as the overall price of the property, average insurance rates, how much work the home needs, etc. However, location plays just as important of a role and can make or break how well a property does.
What surrounds a property may repel or attract certain tenants. Convenience is a major factor, and proximity to grocery stores and restaurants can go a long way. But what about fast-food restaurants? If you want to learn more about how location can affect property values and the part that fast-food restaurants play, you’ve come to the right place! Let’s look at what to consider and how to find the perfect location for your next investment.
How Does General Location Affect Property Values?
Whether you’re a real estate investor or landlord, you’re not just running a business; you’re offering someone a home. Your property should be like a mirror into the future for tenants, as they should be able to see themselves living there. These requirements may look different from person to person, but generally speaking, the neighborhood should be of at least decent quality. The better the neighborhood, the more people are willing to pay to live there, which increases the demand for properties in the area, including yours.
What Makes a Good Location?
Again, what someone considers a “good” neighborhood will vary, but there are some general factors that you should consider. Keep in mind, though, that there is a delicate balance—not all factors hold equal weight.
What is the unemployment rate currently like in the area? If the unemployment rate is high, the local economy may not be generating enough income, which can impact your property’s overall value and how much rent you can charge. Conversely, the lower the unemployment rate, the higher the cash flow and the greater the area’s financial freedom. Plus, the easier it is for people to rent from you, the more likely they are to do so and pay you on time.
When evaluating a property, see how much construction is going on in the neighborhood. Are shops, fun amenities, and other forms of expansion in progress? If so, this is a good sign that the economy of the neighborhood will improve over time, and people may move to the area in search of jobs and homes. If you notice the economy is good and the neighborhoods are expanding, you’ll want to jump in on the investment sooner rather than later.
Accessibility and Proximity
Ideally, the property should be close to necessities such as schools, hospitals, grocery stores, laundromats, and public transport. You should also consider how close the property is to roads with high traffic or local partying areas. People are typically willing to pay a lot more for convenience and tranquility. Think of it this way: would you rather live in a home that is within walking distance of the grocery store or one that is 45 minutes away?
Crime Rates and Safety
How safe a neighborhood is will significantly alter the value of a property, as most people want to live in a safe neighborhood. The higher the crime rate, the fewer people want to live there, which subsequently lowers the demand for your property and its overall value. But don’t judge an area’s safety based on rumors and speculation. You should take the time to look at real crime statistics, as it will help you differentiate reputation from actual crime rates.
Surrounding amenities are always a plus and can increase your asking price, but they’re not absolute necessities. Public pools, playgrounds, malls, theaters, and the like are all bonuses that some people are willing to pay extra for. Most of the time, however, people can live without being close to these things and won’t break the bank over it. However, if you’re willing to wait for the right tenant, they may be more than willing to pay.
Do Fast-Food Locations Affect Property Values?
Ultimately, the answer is yes, fast-food locations can affect the value of your property, but how it’s affected depends on a few factors. As we’ve reviewed, people don’t necessarily want to live near high-traffic areas that cause a lot of noise. Living right next to a fast-food chain may not be ideal for most people and can lower your property value. However, if the fast-food restaurant is within driving distance of your property, it’s much less likely to negatively impact the value of your property. In fact, homebuyers often view close-by fast-food locations as a bonus rather than a shortcoming.
Additionally, let’s face it—not all fast-food restaurants are equal. The same people who would love to live within walking distance of a Starbucks would dislike being that close to a McDonald’s. The overall aesthetics of a nearby fast-food chain will affect the demand for your property and its overall value.
However, the idea that a fast-food chain will automatically destroy local property values is a myth. If it were true, many neighborhoods would be vacant. In truth, nearby fast-food restaurants are likely more indicative of growth and an expanding local economy. As long as they don’t contribute to excessive noise and look relatively nice, they shouldn’t depreciate your property’s value.
What About Other Restaurants?
Once again, there isn’t really a straightforward answer. Being near a nice restaurant never hurts and is also indicative of a healthy local economy, but it’s unlikely that people are going to pay more for it. Even if your property is near an incredibly popular restaurant, trends come and go, and people recognize this. A restaurant that was popular a month ago can run into the ground in a matter of weeks. Although a nice nearby restaurant may entice a tenant or two, you shouldn’t view it as a deciding factor when investing in property. More than likely, being near a restaurant won’t do much for your property’s value, but it certainly won’t hurt it either.
If you’re struggling to find the right location to invest in that ticks all your boxes, contact Excalibur Homes today. We’re a property management company in Decatur, GA, with the knowledge, skills, and resources to help you find the best investment and make the most out of it.