When you're buying a home as an investment property, there's a lot of work that needs to go into that decision. You'll want to make sure the price you pay is just right, the area has a thriving local economy, the market isn't oversaturated, and, in the case of a house flip, the money you'll need to sink into renovations and repairs isn't too extensive.
But there's another piece of research you should do when buying a home as an investment: Check out the nearby schools.
The importance of good schools
When you buy a home as an investment property, you're most likely either going to rent it out or flip it and attempt to sell it at a profit. And in both cases, you stand to make more money if you buy a home in an area where the schools are highly rated.
The National Bureau of Economic Research reports that there's a definite correlation between the money spent on school and home values. Specifically, it found that for every dollar spent on public schools in a community, home values increased by $20. Meanwhile, in a 2017 study by the National Association of Realtors, 26% of home buyers said they considered the quality of local schools when looking for a new home.
As such, it really pays to put some thought into the school system you're looking to buy in. And these days, doing so is actually pretty easy.
How to vet a school district
When you're marketing a home to prospective buyers or renters, the ability to call out a great school system is key. Families with children will no doubt want to ensure that they're buying or renting in a good district, and while childless renters may not care about schools immediately, childless buyers are much more likely to be thinking long-term.
So how do you go about researching school districts? GreatSchools is a good place to start. There, you'll get to sort through different categories, like test scores and college preparedness, to get a sense of how strong the academics are nearby.
Niche is another great resource to use when researching schools. Specifically, you'll get to review different schools' report cards to see how they rank in terms of academics, activities, and safety.
Of course, it's not just public schools that can tie into home value. Buying an investment property in a neighborhood with a number of reputable private schools can also work to your benefit.
Think about proximity, too
On your quest for an investment property, don't just aim to buy someplace where the schools are highly rated. Rather, you may want to aim to buy a home that's close, but not too close, to a local school.
Many suburban areas don't offer busing through their school districts, so a home that's five blocks away from a local middle or high school could be a draw for working families who don't want to have to worry about transportation. That said, you may want to steer clear of homes that are located right behind schools, as the potential noise level could be something that turns buyers off.
Either way, pay attention to what schools are like before you buy a home you're looking to make money on. It's a move that could serve you very well when you go to rent or sell it.