How to Determine Whether to Buy Urban or Rural Real Estate

March 22, 2009 by  
Filed under Real Estate Investing

Investors are always looking for new opportunities, and many enjoy the vast variety available in the world of real estate. Expansions of populations from urban to rural locales creates an entirely new way for these investors to find their ideal piece of property.

Rural properties, just like urban options, can also be businesses such as ranches, farms or bed and breakfast operations. These are available in the countryside around the world, on each and every continent. However, there are important differences to be considered when moving from investing in urban to rural properties of both the residential and commercial varieties.

Environmental issues may be guarded by more stringent requirements in areas of lower population densities, such as farmland, mountain ranges and islands. Conversely, some areas may be more relaxed when compared to their urban counterparts.

These obligations for landowners include ensuring there is clean water supplied, fishing and hunting rules are obeyed, and only permitted recreational vehicles are used in the area. This may also change your audience when it comes to marketing a rural property in order to sell it in the future.

Some rural growth areas are doing just that due to a growing number of retirees. Other reasons for the influx include more and more business owners using the Internet to go to work every day. Some areas are actually experiencing a decrease in populations, causing some investors to believe that these areas of decreased property values will eventually rise again in the next few years.

When selling a piece of investment real estate in a rural area, it’s also important to realize that advertising and marketing will need to be more widespread and far-reaching to find potential buyers. This is where the Internet can be used to cheaply spread the word and find urban residents wanting to relocate to a different area.

For the same reasons, it can be difficult to find properties at an ideal investment price in urban areas. This part of the process simply takes a little extra time, especially in climates where property values are sharply rising. If you’re investing in a popular area, it may be difficult to find properties at all, so you’d better be great at the waiting game.

Sometimes, these properties can be more difficult to value for an investor because many are unique, historical or custom buildings like no other. However, this may also mean you’ll be able to play up this fact and seek a higher selling price in the future.

In some areas, a stock-piled floor plan is used throughout new building sites to reduce development costs in newer neighborhoods. Other communities may prohibit this practice, making each home unique and thus more valuable.

Also remember that several laws and regulations will differ for any type of real estate investment in a rural area. Visit the local government offices or find a qualified real estate attorney that can advise you of major differences in these obligations before purchasing a property.