Big Cities vs. Rural Areas
Characteristics of Big Cities
A big city has a huge population and high demand for leasing properties which lowers vacancy risk.
Banks feel comfortable to loan to a property in a big city. It’s easier to sell properties than ones in a country side.
However you may encounter competitive properties and you may have to lower rent to attract new tenants.
In the central area of a city, the price of a land is expensive and property is also expensive since there are so many demands. Investment return tends to stay low.
Characteristics of Rural Areas
Comparing to big cities, there are not many competitors and lands are relatively cheap so you can get high return.
Typically some landlords do not pay too much attention about vacancy room problems. It should be easier to win over your competitors. Depending on how you go about it but it might be able to keep high occupancy rate.
However there are downsides as well. In rural areas, property management companies tend to be slow in action when it comes to customer services since there aren’t many competitive management companies surrounded.
Also depending on a location, population may decrease dramatically and you may run into a problem that it would be hard to find new tenants. There are also possibilities that it would be difficult to sell properties so easily because there aren’t many financial institutions to borrow money from.
It is hard to say which is better but it would be a good idea to combine both side demerits and purchase a property.
It’s up to your own investment strategy however it is recommended to have a mix of both in your portfolio.