TOP 5 STRATEGIC INDICATORS
Strategic Indicators are signs that signal whether a particular piece of property is more likely to lead to successful wealth creation… financial stagnation… or worse, ruin. Without knowing which Strategic Indicators are important, too many people buy property virtually guaranteed to lead to disaster instead of wealth creation.
Strategic Indicators take into account things like neighborhood trends, area business growth and involvement, school statistics and market trends to name a few. These are important because they are key to locating property that has a higher likelihood of giving you the kind of return on your investment that will make you and your wealth portfolio smile. And with the tools we provide, it is easy to spot these right away.
Though the list is endless, here are our TOP 5:
NEIGHBORHOOD MATURITY. The obvious one is age. Is the neighborhood mature way past its prime. Is the neighborhood showing significant signs of stress – unkept yards, abandoned cars, no one cleaning up after dogs, kids not playing, or houses boarded up are just a few. This is an indication that this might not be a good rental neighborhood given the tenant you are after. If the maturity of the neighborhood are classified as older homes, no graffiti, cars and lawns well kept, this might be an awesome middle class neighborhood. Just remember, older does not mean run down. It also means that best of neighborhoods are not good rentals. It is incredibly important to understand who you are expecting to rent too so it will help you understand if the maturity of neighborhood will work for you.
FAMILY ORIENTED. Are families making the homes they live in “their” home? It is important that you drive through the area, especially on weekends, see what everyone is doing. Are they talking over the fence lines or are they keeping to themselves. Are they decorating for the holidays. Are they allowing their homes to be an extension of their personalities. This strategic indicator helps us figure out who we are going to attract as tenants. It allows us to help determine the safety of the neighborhood. We also suggest that you go look where the nearest schools are – families tend to walk their younger kids to school.
RENTAL SATURATION. Plain and simple, is there a large number of rentals in area as compared to the number of owner occupied homes? You can check tax records for a neighborhood to see if they are rentals or owner occupied. You can drive through the neighborhood and look for Rental/Lease signs. Call listing agents. Why is this strategic indicator important, because the higher the number of rentals, the lower the amount of rent. People want to live in a place where they feel at home, they rent homes so they can have a part of the american dream. Plus, homeowners will always take care an OWNED property, more than a renter will. To many renters normally means that the neighborhood is starting its decline.
CONVENIENT PROXIMITY. Is this neighborhood and the proposed rental near places of employment, shopping, schools, public transportation, mailbox, childcare, schools or pharmacy. Normally, people that want to rent are looking for convenience, they want everything “walking distance” close. They don’t mind driving, but if everything is close enough to walk they will consider it more desirable. This strategic indicator allows you to grade the qualities of the businesses and support centers that EVERY renter needs.
ENGAGE TENANTS. Probably the MOST IMPORTANT strategic indicator of them all! Does your rental reside in an area where you can attract your ideal tenants. Will you find the type of tenant that you want, will they be able to pay the asking rent, can they afford the deposits, will they treat your property as their home, and will they stay longer than their first lease. If you don’t think they will stay, you think you will have to settle for something else then your ideal client, or you don’t believe you can attract/keep that will pay the rent – You might want to think of buying a different property. Though, there is a POSITIVE side – if they can pay, wanna stay, and will take care of your property as if it is their home – it might be the best indicator that this neighborhood is for you!