To achieve the desired ROI, property owners need to analyze the impact of new developments on existing or potential rentals.
Future developments could change the character of the neighborhood, affecting both current and potential tenants and your revenue. Taylorsville property management professionals can help investors understand the importance of thoroughly analyzing an area and how development projects could impact long-term ROI. Today we look at why this is an important factor to consider when analyzing a new property you’re considering for your portfolio.
What Are the Advantages of Coming Developments for Investors?
The right coming developments in a market often attract both buyers and renters. People who rent homes are attracted to developing neighborhoods and nearby resources because they have more options for work and play.
Additionally, developments can bring many positive changes to property investment areas, including:
- Lower crime rates as revitalization efforts begin.
- Abandoned or neglected homes are demolished and replaced by quality housing.
- Businesses move into the area.
Investing in growing areas will allow you to capitalize on the increased demand for housing. This means that investors often see a better long-term ROI for rental properties when positive developments are planned for the area.
Avoid Unwanted Property Development
However, not all development has a positive impact on housing communities and rental property investments. Consider the impact of planned construction projects on the surrounding community. In some cases, developers don't pay enough attention to the community's needs. They build large projects without providing adequate parking, sidewalks, or other amenities that would benefit residents and support consistent revenue for your rental property.
For example, large development projects can increase traffic congestion, which causes headaches for drivers and pedestrians alike. Long-term development projects can also discourage people from visiting the area, which hurts businesses that rely on foot traffic. When businesses suffer at the hands of other development initiatives, an area can become less desirable for residents, too.
The possible lack of local amenities or the loss of amenities that these projects may generate might result in income loss by deterring renters from choosing your home.
How to Find Local Development Plans
So, how can property owners find information about potential projects in the area? Municipal planning departments have a wealth of information regarding zoning and development. Contact the local government office and ask if they have any information regarding future developments.
You can also drive the area or work with a Taylorsville property manager to learn about plans for the market and how they could impact your next investment property purchase. Some projects may harm the value of your property instead of improving it.
For example, if a developer builds a large apartment complex near your single-family rental property, it could saturate the neighborhood with available rental units, giving you more competition. In addition, the increased number of apartments could drive down rents, making it harder for property owners to generate the revenue they need.
How Does Development Improve Property Value and Returns?
While property managers can help you understand the ideal updates to increase your property's value and returns, you should also know about the potential effects of new businesses and buildings on your property. Look into plans for new schools, hospitals, retail, restaurants, housing, and other industries, as well as other public infrastructure, then talk with a property management professional about how these projects could boost a nearby investment’s value.
Remember: a lack of growth can be a warning indicator when investing in an area. If there aren't any new developments planned, it might mean that the area isn't growing anymore. This can cause the prices of nearby homes to drop, and your rental property may not be attractive to tenants.
Development can bring many benefits to the rental market, cities, and towns, including increased job opportunities and the need to build more affordable housing. However, when looking at potential returns for a new project, talk to an expert about what you should do. They can help you decide whether to invest in a new location, sell a property in an area that is declining, or let you know if a new development could improve the returns for a specific property.
Find the Perfect Investment Property With a Taylorsville Property Management Company
Finding the ideal rental property is not an easy endeavor, but one of the best Taylorsville property management companies can help you research properties and neighborhoods to find what you need.
To end your hunt for property management near me, reach out to the team at Reeder Asset Management! We have the experience you need if you're thinking about buying a new property in the area, including how future developments could impact the investment. In addition, our quality property management services will help you boost your return on investment long-term.
Learn more about what property owners need to experience great returns! Get your free copy of the "Biography of the Perfect Investment Property."