The location of your property investment is one of the most important choices you’ll make in the whole process. In most cases, the right location will carry the investment, guaranteeing either success or failure.
This is why it’s so important to research the top locations from the moment you choose to invest, not just in terms of cities or towns but also popular areas within these places.
Take Birmingham as an example. The different neighbourhoods within Birmingham – whether that’s Digbeth, Jewellery Quarter, the city centre or Brindleyplace – are all viable but all offer something different for investors and fit different strategies.
Below, we explore how to choose a property investment location, how to go through the process and how to maximise your research.
1. Look at local market yields
A key metric for measuring the success of an investment is the rental yield it’s delivering. When you’re choosing a property investment location, identify areas delivering above-average yields and look at any property that fits into your budget.
Remember that there are two types of yield: gross and net. The gross rental yield is the return on investment you can expect based on the property price and monthly rent before accounting for any other costs. While it’s a great indicator of performance, it’s important to remember that it’s not the final return and you’ll need to consider other expenses.
The net rental yield is the return you can expect after you factor in costs such as mortgage payments, insurance, maintenance, agent fees and other bills. This is a much more accurate representation of your return on investment but differs depending on the individual investing and the development in which they’re investing.
2. Compare property price growth
The second – and arguably more important – metric that dictates investment success is the property price growth a development experiences. Often referred to as capital growth, it’s a long-term indicator of success and provides profit on sale.
It’s critical that during your research, you consider how property prices have changed over the last 10 – 20 years. While on average, UK house prices have roughly doubled every 15 years, some areas have performed better than others.
When you have this information to hand, you’ll be in a much better position to choose a property investment location based on both historical data and current property prices. Other resources, such as property price forecasts, also allow you to look ahead, meaning you can plan an investment in an area that is expected to experience price growth.
3. Develop an investment strategy and match it with your location
In an earlier blog this month, we laid out the best property investment strategies to consider in 2025. If you already have a property investment strategy in mind, it’s the perfect opportunity to marry this up with your location research.
Think about the property you’re opting for and how the location supports it. An investment strategy focused on two-bedroom apartments delivering high yields will mean you’re typically opting for a city centre. Now you’ll want to consider which city centre offers the best amenities, employment opportunities and transport links for your desired tenant.
A strategy looking at larger houses for families will generally require a different location, most likely a suburb or another more ‘relaxed’ environment.
When you have a strong investment strategy in mind, it’s much easier to find the location that meets your needs.
4. Identify your desired tenants and where they might choose
As well as matching your investment strategy with your location, it’s also worth thinking about the ideal tenant you want to serve. If you have a vivid picture of your ideal tenant, it’s much easier to find locations that either already have these types of tenants or are developing the infrastructure to support them.
If you’re considering investing in an HMO, for example, you’ll typically target student areas where you’ll have plenty of consistent tenant demand. This will significantly alter the location you opt for. Likewise, if you want a high-powered professional couple as tenants, you’re probably not going to invest in a rural market town.
Take the time to build an idea of which tenants fit your strategy, if the property type you’re opting for meets their needs and thus, which location can act as your foundation.
5. Consider the property type you want to invest in
The final piece of the puzzle is the property itself.
While choosing a location is vital, it’s just as important to look at the property type you’re investing in. There are a couple of critical factors at play here, including the following:
What is your budget?
What is your investment strategy?
What tenants are you looking to attract?
Are you dealing with maintenance and tenant issues or paying a third party?
Are you investing in an area you know or somewhere you’ve never been?
If you can answer all of these questions, you’ll generally have a good idea of both what you need and what you’re looking for. The idea is to then cross-reference this with your chosen strategy – in terms of investing and tenants – before making an informed decision.
6. Look at local market transport links
Nearly every tenant survey in existence highlights the same thing – renters want to live near good transport links. It’s desirable with nearly every demographic and significantly improves your chances of finding consistent tenant demand.
When you’re considering a property investment location, look at the local transport links. Does it have train links with other popular destinations? Is there decent road links to major A-roads or motorways? Does the location have an airport nearby?
These are all questions you should ask yourself when considering how to choose a property investment location.
7. Look at regeneration in the area that might help increase your prices
Another great indicator of potential success in a destination is the amount of inward investment the area is experiencing.
Regeneration and redevelopment not only create new amenities for potential tenants but also create excitement, putting the location at the forefront of everyone’s mind.
If you have a shortlist of investment locations you can’t choose between, it might be worth looking at the different construction projects happening and how they might support an investment in the future. In Birmingham, for example, projects such as Arena, Paradise and HS2 all help reinforce the potential of the city as an investment destination for years to come.
FleetMilne is an award-winning estate and letting agent based on Colmore Row, right in the heart of Birmingham city centre.
Known for delivering excellent service for landlords, vendors, tenants, and purchasers, we pride ourselves on providing elite property services with integrity and personability every step of the way – no gaps or cutting corners.
