Amenities: Where To Invest?

Hotel owners and operators have long offered complimentary amenities to enhance their guests' stays and set themselves apart from the competition. However, the decision of which amenities to offer is often a point of contention between hotel owners, who are reluctant to pay for amenities that don't provide a good return on investment, and brand managers, who are eager to enhance their brands with the latest offerings.

A report by Cornell University's Center for Hospitality Research (CHR) suggests conducting an ROI analysis to determine which amenities are the most beneficial. The researchers analysed the short-term return on investment of three popular complimentary amenities—bottled water, internet access, and fitness centre use—for 33 upscale and luxury hotels. They found that while internet access was the most attractive to first-time guests, bottled water offered the highest ROI in terms of generating repeat visits.

Assess the local economy and real estate market

When it comes to investing in real estate, location is key. It is important to research the local economy and real estate market to determine the best location for your investment property. Here are some factors to consider when assessing the local economy and real estate market:

• Job availability: Look for cities with a young workforce and growing wages. Locations with growing employment opportunities attract more tenants. Check with the U.S. Bureau of Labor Statistics (BLS) or visit a local library to find out about job availability in a specific area. Keep an eye out for announcements about major companies moving to the area, as this can be a sign of a healthy local economy.
• Property values: Research the selling prices in the area to get a sense of the local market value. Look for signs of growth in real estate values. Watch out for new developments that could hurt the price of surrounding properties.
• Rental demand: Assess the vacancy rates, days on the market, and population growth to evaluate the rental demand in the area. You can find this information on the U.S. Census Bureau's website.
• Amenities: Look for cities or neighbourhoods with plenty of amenities, such as parks, shopping, dining options, and access to public transportation. These amenities can help attract potential renters and optimise your return on investment.
• Crime rate: Consider the crime rate and overall safety of the neighbourhood, as it can significantly impact the success of your investment property.
• Schools: If you are targeting family-sized homes, consider the quality of local schools. Good schools can be a major factor for families with children when choosing a rental property.
• Property taxes: Property taxes can vary widely across different areas. While high property taxes are not always a bad thing, especially in desirable neighbourhoods, be cautious of locations with high taxes and few appealing features.

By thoroughly researching the local economy and real estate market, you can make an informed decision about where to invest your money and maximise your chances of a successful investment.

Consider the financial stability of the area

When it comes to investing in real estate, it is imperative to assess the financial stability of the area you are considering. This involves evaluating various aspects to ensure a wise investment decision. Here are some key points to consider:

Job Market and Economic Stability

Research the local job market and economic conditions in the area. Look for cities with a diverse range of industries and a strong job market. A diverse economy helps protect against potential downturns in specific sectors. Check if there are plans for major companies to move into the area, as this can be a positive sign for the local economy. A healthy job market attracts more tenants and contributes to the area's financial stability.

Property Values and Growth Potential

Analyze the historical property values and growth trends in the area. Look for signs of steady growth or appreciation in real estate values. This indicates a financially stable area with potential for long-term gains. Consider the value of the property you intend to invest in relative to the surrounding neighbourhood. Ideally, you want to invest in an area where property values are expected to increase over time.

Rental Demand and Vacancy Rates

Assess the rental demand and vacancy rates in the area. High rental demand and low vacancy rates are indicators of a financially stable market. This means your investment property is more likely to attract tenants, resulting in consistent rental income. Check the U.S. Census Bureau's website for vacancy and homeownership rates, which can provide valuable insights into the stability of the local rental market.

Local Taxes and Future Developments

Understand the local tax landscape, including property taxes and other fees. High property taxes may impact your rental income and profitability. Additionally, research any plans for future developments or construction projects in the area. While some changes can improve an area's desirability, others may negatively affect property values. Stay informed about any factors that could influence the financial stability of the area.

Crime Rates and Safety

Consider the crime rates and overall safety of the neighbourhood. High crime rates can deter potential tenants and impact the stability of the area. Look for neighbourhoods with low crime rates, as they are generally more desirable and tend to attract families and long-term tenants. Safety is a crucial factor in the financial stability of an area.

By carefully considering these factors, you can make a more informed decision about the financial stability of the area you are investing in. Remember to conduct thorough research and seek additional professional advice if needed to ensure a successful real estate investment.

Research the quality of local schools

When investing in real estate, it is important to research the quality of local schools. This is because the quality of schools in an area can have a significant impact on property values and the desirability of a neighbourhood.

Firstly, the quality of local schools can affect property values. Research has shown that there is a correlation between school expenditures and home values in a given community. A study by the National Bureau of Economic Research found that for every dollar spent on public schools in a community, home values increased by $20. This means that investing in an area with good schools can lead to higher property values and a potential increase in equity for homeowners.

Secondly, the quality of schools can also impact the desirability of a neighbourhood, especially for families with children. According to the National Association of Realtors, more than half of homebuyers with children under the age of 18 consider the quality of school districts to be an important factor when purchasing a home. Good schools often indicate a good neighbourhood with desirable amenities such as safe streets, an abundance of restaurants, and access to transportation. As such, investing in an area with highly-rated schools can attract more potential tenants or buyers, particularly those with families.

Additionally, the quality of schools can also impact the length of time it takes to sell a property. Homes in desirable school districts tend to sell faster and are more likely to retain their value, even in a down market. This is because excellent schools can act as a "lynchpin for strong values in a given area". Therefore, investing in an area with good schools can provide some stability to property values and potentially lead to higher returns on investment.

Furthermore, researching local schools can also help investors understand the specific needs and preferences of their target demographic. For example, families with children may prioritise not only the quality of schools but also the distance from their home to the school. They may also seek out neighbourhoods with kid-friendly amenities such as parks, community pools, and libraries. By understanding these preferences, investors can make more informed decisions about the locations and types of properties they invest in.

Overall, researching the quality of local schools is a crucial aspect of picking the right amenities for investment. It can provide valuable insights into the potential returns on investment, the desirability of a neighbourhood, and the specific needs and preferences of target tenants or buyers.

Evaluate access to public transport

When it comes to evaluating access to public transport, there are several factors to consider. Firstly, it is important to research the different modes of transportation available in the area, such as buses, trains, subways, or trams. The frequency and reliability of these services are also key factors, as consistent and timely public transportation can greatly improve accessibility. Additionally, the distance between transport stops or stations and the desired destinations, such as schools, workplaces, or recreational areas, should be considered. Shorter distances or the availability of feeder services can enhance accessibility.

Furthermore, the level of connectivity and integration between different transport modes is crucial. Well-designed interchanges that provide seamless transfers between bus, rail, and other transport options can significantly improve accessibility. It is also worth investigating the existence of any plans or initiatives to enhance the public transport network, such as the development of new lines, extensions, or upgrades.

Another aspect to consider is the affordability of public transportation. The cost of fares can influence an individual's decision to use public transport, especially for those with limited financial resources. Analyzing the pricing strategies, concession options, and any available subsidies or discounts can provide insights into the accessibility of public transport for different user groups.

Lastly, it is essential to assess the quality of the public transport system. This includes evaluating the comfort, safety, and cleanliness of the vehicles and stations, as well as the availability of real-time information, accessibility features for individuals with disabilities, and the overall user experience. By considering these factors, you can gain a comprehensive understanding of the accessibility offered by the public transport system.

Look at the crime rate and safety of the neighbourhood

When choosing the right amenities for investment, it is essential to consider the crime rate and safety of the neighbourhood. Here are some detailed instructions to guide you through this process:

Firstly, it is crucial to research crime statistics for the area. Look for data on both violent crimes, such as assault and robbery, and property crimes, like burglary and theft. Most cities provide this information on their websites or through local police departments. Pay attention to any significant increases or decreases in crime rates over time, as this can indicate the safety trends within the neighbourhood.

Well-maintained public spaces, infrastructure, and residential properties are also good indicators of a safe neighbourhood. Pride in ownership is often reflected in well-kept yards, neatly trimmed lawns, and a lack of vandalism. Conversely, neglected homes, abandoned properties, and condemned housing may suggest a declining neighbourhood with higher crime risks.

Adequate street lighting is another important safety factor, especially at night. Well-lit streets tend to deter criminal activity and provide a sense of security for residents, while dark areas can foster higher crime rates.

Active neighbourhood watch programs or community engagement initiatives can also contribute to safety. These programs demonstrate a proactive approach to safety and a strong sense of community. Additionally, strong community presence and engagement can lead to lower crime rates and enhance the sense of security.

The quality of schools and educational institutions in an area is often linked to its safety levels. Safe and well-managed schools indicate that the neighbourhood prioritises the safety and well-being of its residents. Research the performance and reputation of local schools to gauge the overall well-being and safety of the community.

The presence and accessibility of local law enforcement can also impact the safety of a neighbourhood. Frequent patrols, nearby police stations, and a cooperative relationship between residents and law enforcement can positively influence the area's safety. Remember that no neighbourhood is entirely immune to crime, so comprehensive research is essential.

To further enhance your understanding of the neighbourhood's safety, consider using online tools and platforms. Crime mapping websites, such as CommunityCrimeMap.com, offer visual representations of reported crimes in specific areas. Additionally, platforms like NeighborhoodScout, AreaVibes, or SpotCrime provide neighbourhood safety ratings, school ratings, demographics, and additional amenities to help you make a well-rounded decision.

By combining these strategies and considering multiple factors, you can make a more informed decision about the safety and suitability of a particular neighbourhood for your investment. Remember to cross-reference different sources and tools to gain a comprehensive understanding of the crime rate and overall safety of the area you plan to invest in.

Frequently asked questions