4 things to look for in a neighbourhood before investing

Picking the right neighbourhood is as crucial as finding the perfect property.

landed high rise selangor klang valley

© rf123

Finding the right investment property takes a lot of research and considerations. The same goes for selecting the right neighbourhood as well. The reputation of particular neighbourhoods can be deemed as important as selecting the perfect property. It’s not just a matter of choosing a quiet, leafy suburb, but picking a house in a neighbourhood that will attract a steady flow of tenants.

Certain key elements differentiate the neighbourhoods with good reputations and positive trends from the areas that are stagnant or trending the wrong direction. Here are four main things to look out in an area before you invest in the property.

#1 Crime rate

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Crime can have a significant and sobering effect on the demand and desirability of a certain neighbourhood. No one wants to be living in an area where crime is a common encounter. Even commercial tenants will be reluctant to be at an area that is seen unsafe for their business. Although it is difficult to find a neighbourhood that is totally crime-free, you don’t want to find out after closing the deal that you have purchased a rental property that is claimed by rival gangs.

Therefore, it’s vital to find out about the crime rate in a certain area before investing. Once you’ve found a property that you like, talk to people in the vicinity or Google news about the neighbourhood first before you decide to purchase the property for investment.

#2 Transportation

Kuala Lumpur LRT

© Getty Images

Proximity to transport is one of the top drivers of rental demand. Any area with added transit or transportation will benefit the property values. If an area is planning to implement a transportation system, this is a sure fire sign that the values will go up as that area is now more accessible to a larger population base.

Since Klang Valley is beefing up their public transportation system with MRT and LRT extension lines, as an investor, all you need to do is use Google Maps to help you map out distances from various points to train stations and bus stops. A walking distance of five to ten minutes from major transport is prized by many renters, so this is something you should keep in mind when deciding which neighbourhood you want to invest in.

#3 Schools

Penang-Free-school

© Wikipedia Commons

A neighbourhood with schools nearby is a major plus if you intend to attract families to your rental property. Having a variety of schools like primary, secondary and international schools will definitely be an added bonus because parents will want to send their kids to an education centre near to their home. Again, the availability and quality of a school can easily be analysed through research on the internet or simply talking to the locals.

#4 Future developments

© Lendlease

Is there a major development coming up in a certain neighbourhood? Has the government announced plans for a new business precinct? These are all important factors to consider before you choose a neighbourhood to invest in. Or, if a neighbourhood is showing early signs of gentrification, then there’s a high chance that the area will grow faster and you’ll be able to see higher returns on your rental property.

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