You don’t have to be a real estate expert to understand the importance of location when we’re talking about investment properties.
Location is everything. You hear it all the time: location, location, location.
Everyone has a different idea about what makes a great location, however. Surely you’ve read (or you’re at least familiar with) the Aesop’s Fable about the Town Mouse and the Country Mouse. The two mice valued different things. They ate different foods. They provide a contrast in what a city is like versus a smaller town.
Where would you like to invest? There are differences in buying a property in a larger city versus a smaller town. The location you choose will depend on your investment goals and the tenants you aim to attract.
Prices and Rental Values
Let’s start with the obvious. You’ll spend more on a property in a large city than you will on a similar property in a small town. There’s a larger population in big cities, typically a stronger economy with more jobs, and a constantly growing pool of qualified tenants. If you want to invest in a larger city, you’ll have to expect to spend more money than you would in a small town.
Rental values are higher, too, in cities. The average rent in a city like Seattle will be higher than the average rent in a smaller and more suburban town. The more remote you get, the less likely you are to find residents quickly. The market simply moves faster in cities, and it’s also moving at a different price point.
Investment Options vs. Personalized Experiences
When investing in real estate in a large city, you can expect that you’ll have more options. The inventory is typically larger, and you can choose to buy single-family homes, apartment buildings, duplexes, condos, and units in multifamily buildings. You have a diverse selection of neighborhoods within a single city.
A smaller town will have fewer options, but you’ll also have a more personal experience. There might be a stronger sense of community, and you could find it easier to work with agents, property managers, lenders, and other professionals. They’ll possibly be more interested in you and your unique goals and needs.
Tenants will face similar choices. If they want to live in a big city, they’re looking for a different experience than those tenants who want to rent a home in a small town. Think about your ideal tenant in addition to your own ideal investment property. Who do you want to rent to?
Where will Investors Earn More Money?
There is no way to say, with certainty, whether it’s more profitable to invest in one or the other.
You could do very well with a rental property in a large city, and you could do just as well with a rental property in a small town. There are opportunities and challenges that come with each geography.
Your investment success depends on preparation, budgeting, and working with a team of local experts. We can help you decide where to buy and what to buy. Please contact us Real Estate Gladiators. We serve Monroe, Issaquah, Bellevue, Everett, Lake Stevens, Kirkland, and other cities in and around King and Snohomish counties in Washington State.
