In making a decision you have to thoroughly weigh your options. Real estate like every other business has target customers, and you are investing to make money off it so you need to consider who your target market is before making a choice. There is no good or bad choice when deciding between these areas but should be based entirely on the needs of the market. if you do not have a target market in mind, carry out a feasibility study to see which can be a good fit for you. You can use the following parameters.
Cost
This depends on how much you are willing to invest. People always say real estate is not capital intensive, you could pay half the money, have the bank loan you the rest and have your tenants pay your mortgage but you also need to know that those things do not come easy and it is better to not bite more than you can chew. Acquiring a property in a rural area is much cheaper than in the urban area. People keep migrating from these areas creating a gap in the real estate industry. In the urban areas, people are migrating over there, demand is more than supply making such an investment an expensive one. You could get a rural property for half the price you would get an urban one. The amount of money you are willing to invest and the amount of you are willing to loan are major factors here.
Accessibility to utilities
Truth is that as much as people might be moving to the urban areas, a lot more people are moving to rural areas due to how expensive living in capital cities can be but they consider things like accessibility. If you are considering buying a property in a rural area, look for one that is in close proximity to urban areas. Urban areas might be expensive but that’s where we have schools, jobs, hospitals, etc. Some people are actually willing to compromise on how long it takes to commute to work, schools, etc. if there is a good functional transport system. This is something you should consider when investing this will without a doubt make your property a lot more attractive. Urban areas are already central to this facility, making them a much better option.
Competition
As pointed out earlier, there are a lot of rural dwellers migrating to urban areas leaving their homes. There is a large number of properties available. There is a very low chance that you would be vying for the same property with other investors as is evident with capital cities. This advantage while getting the property can also be a disadvantage when selling it because there is little to no demand for them. Also, the fact that there are fewer hotels in the rural areas making your property a hotshot for AirBnB. In urban areas the competition is stiff, leading to an increase in the cost of investment and selling price.
Growth and Development
The rural landscape is a huge one. People at times buy these lands, have homes on them and use the rest of the land as farms. As an investor, you could buy just one land and build a couple of buildings on it. This has been the way with urban areas and development is already hitting the rural areas and in a couple more years they will be big shots. With an urban property, there is no form of building expansion that can take place. Everything is clustered together and you will not be able to get as much land as you would in the rural environment for the same price or less.
Rules and Regulation
There are fewer laws governing properties in rural areas, and they are also not as strict as the capital cities. To expand your land in a rural area is a lot less stressful than it would be in an urban area. Then the bureaucracy too is minimal. The property tax on rural properties is also not as much as those on urban properties. Make sure to check land-use restrictions, like land easements which grant access to a portion of the property to an unrelated party, conveyance of mineral rights grants unrelated party authorization to extract and sell mineral for financial gain etc.
Return on Investment
In real estate there is mostly always a positive ROI except in case of economic downfall or doom in the industry because economic conditions have major impacts on real estate as with other industries. So as an investor you should be much more interested in one with a high ROI and one that comes quickly at that. Your best bet would be to invest in urban areas as there would always be a demand for your properties.
After you must have decided on which area to invest it, the next thing is to find the neighbourhoods with the best properties.
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