For homeowners and real estate investors alike, purchasing a property has many considerations — everything from the condition of the home and the price, to getting financing and making an offer.

Above all, choosing the perfect location to invest your hard-earned money is important for several reasons, including resale value and tenant attractiveness for landlords, and daily quality of living for homeowners.

It’s not hard to differentiate a “good” neighborhood from a “bad” one, but there are neighborhoods that are better suited to a buyer’s lifestyle and characteristics that are wise for a long-term investment.

Below are some indications of a good location whether you want to plant your feet and move in, or make an investment and enlist tenants to occupy the property.

Schools and Parks

If there is a school nearby, you’ve likely found a neighborhood of families. This is ideal if you have children or you are contemplating having a family in the future. Schools indicate a sense of community and safety. Look for a kid-friendly area and a school with a good reputation.

A real estate investor would see the long-term value in acquiring family-friendly property because multifamily homes are easily sold in the marketplace. There are also short-term benefits of purchasing a home in a school district, mainly that it would be a cinch to lease out to prospective or current parents.

Property around universities or colleges also do well because there is high demand from students. While there is no shortage of tenants, just be mindful you may have a high turnover rate due to the temporary school season.


How close is the neighborhood from public transportation routes? If you drive, how long is your commute?

A neighborhood with access to roadways, bus routes and bike paths provides you with an easy way to get around.

Suburbs can be nice for a safe community or to raise children, but you will need to consider your time commuting to and from work and evaluate if it’s worth the expenses and time.

If you are an investor renting a property, transportation should be a main concern. Not only do most tenants want to live near accessible transport routes, but they come to expect it. Homes away from main roads or transit deter those who are unable to drive.


A neighborhood with a local grocery store, gas station or gym offers convenience. Walking distance is preferable. If basic amenities are out of reach, there is a smaller chance of attracting tenants. This is particularly important if you/your tenants do not drive.


The type of people living in your neighborhood might influence your decision to buy property in a certain area.

For instance, if you are a student making an offer on a condo, you may want to buy somewhere close your school, job or friends. Perhaps something more central in the heart of a city, close to entertainment venues and local pubs. Younger, single groups tend to flock to these areas. It can be a great place for meeting others and save you on transport costs as well.

Families usually appreciate the quiet, which is why neighborhoods with other families make for a better arrangement. There is less crime and they are out of the hustle and bustle of downtown.

Crime Rate

If you are house shopping in an urban area, get a report of the crime rate in the area from your local police department or online. While this may seem quite obvious for safety reasons, most people do not think to look into it. Your realtor should also be able to provide some insight on the neighborhood’s crime rate.

Future Development/Age of Area

Find out if there are plans to add a bus/transit route or amenities nearby. Prospective growth may be a good sign. This will increase the value of the neighborhood as a whole.

Conversely, established areas or historic neighborhoods are great investments but may be more costly.

Beware of older neighborhoods that are deteriorated. The buildings and homes in the surrounding area will give you an idea of the conditions. Poor curb appeal won’t attract the type of tenants you want and certainly won’t give you the best quality of life if you plan to raise a family there.

Other Considerations:

  • Tourist attractions: For those who live in big centers, (think New York or Las Vegas), buying property in a high traffic tourist area will be easy to lease, but lacks the peaceful nature should you want to settle down.
  • Noise: Any homes near industrial areas, outdoor music venues, railroad tracks or even major highways can pose a nuisance to not only you, but will definitely affect resale value.
  • Neighbors who take pride in their homes/yards: While you won’t likely know if your neighbors are friendly until you’ve moved in, check out their front yards and see if they take pride in making their yard appealing, friendly and comforting.

The old phrase is used because it’s true: real estate is about location, location, location. Don’t rush the process. Wait until you find a home in an area that you will be proud of living in, regardless if you will be moving in or leasing it to tenants. It might require patience to get the perfect home, but as a major investment, you should take your time to make sure you get exactly what you want.

What do you look for in a neighborhood? Share your thoughts in the comments below!

Posted by Kristy DeSmit

Kristy is a blogger, Twitter enthusiast, and company legalese interpreter.