In this short series of videos we are looking at the twelve questions I think every investor should ask themselves when they start in property and certainly as they go along through their property journey, just to make sure that they are still on track and doing the right things. And in the last video we were thinking about what type of property to buy so the natural question next is well where are you going to find those properties? Where are you going to buy them?
Now most people will assume that they are going to invest near home and that’s fair enough, why not. If you can invest near home it’s going to save you time travelling to find the properties. You may already have local knowledge; if you live in an area you are already going to have local knowledge. Perhaps you already read the local newspaper so you’ll know perhaps where the new shopping centre is going to be built or where the new school is going to go in or where the new roads are going to be or if any areas have been earmarked for demolition or redevelopment so you’ll have all that and that could be really useful information which could help you decide where you are going to buy your properties. And of course if you are thinking of buying properties and managing them yourself then you’ll probably want to be buying nearby so that you can actually get to the properties and do all of the stuff. Now there’s another video there because personally I don’t like the idea of managing my own properties and always suggest don’t manage your own properties because your time is better spent doing other stuff like finding deals. But if you really feel you need to manage your own properties then obviously being nearby makes sense.
But do we have to buy properties near home? Well no we don’t and in fact it all depends on your strategy anyway because it may be that your preferred strategy doesn’t actually work where you live so a good example of that could be I meet investors who want to do buy to lets in London but the yields in London are so low that buy to lets are very tricky in a lot of the parts. I know London’s a big market so I don’t want to be too general about it but generally speaking in large parts of London buy to lets don’t really work because the yields are so low. So does that mean that anybody in London can’t do buy to lets? Well no of course it doesn’t mean that but it might mean they have to do them somewhere else so for example many London investors might buy in the Midlands or Manchester or Liverpool or Leeds, Newcastle; away from home. Is that possible and can one do that? Y
es well of course one can and in this day and age with the internet, with Google, with rightmove, with all the other websites and all the apps that we can now get it can be quite easy, relatively easy anyway, to do rudimentary research about an area online, come up with a shortlist of areas and then just go and visit those areas. Even better if you have JV partners or if you find a deal package or an agent who will work with you in an area away from home that can make all things possible. So the key thing is think about what type of property you need to buy to achieve what you want to achieve, in other words to be able to undertake the strategy that you want to undertake then think about where you are going to buy those properties, where are those properties actually located. And it’s not just necessarily a case of where that type of property is located but you need the right type of property at the right price to make the figures work. So that’s our homework and that’s why we make our money as property investors because we are prepared to put the effort in to find those areas where it works.
Now I live just outside Nottingham, I invest in Newcastle in the North East. Now sometimes people say well why do you do that? Why did I invest in Newcastle and not Nottingham? Well there’s historic reasons why, which I won’t go into now, but the reality is I’m actually glad that I did do it away from home because I know that if I’d invested nearer home I probably would have meddled, I would probably have felt obliged to manage my own properties, I might even have felt obliged to try and do stuff like do basic repairs and I cannot do DIY so for me there is a lot of advantages having the properties away from me. Ultimately all I am interested in is the figures and the income. I am not in love with property for property’s sake. So it doesn’t bother me whether they are on my doorstep or a hundred miles away, two hundred miles away, it doesn’t matter to me; it’s just an asset to producing income.
So I don’t know where you are and I don’t know what your aspirations are but have a think about what you are trying to achieve, have a think about what strategies work in your local area. If any of those strategies suit you great. And if the properties are the right price even better, pursue a strategy nearer home. If you want to pursue a strategy that doesn’t work where you live then find somewhere else to do it and maybe find a JV partner located in that area who can help you do it.
I hope you found that useful.
See you in the next video.
Here’s to successful property investing
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS by the way, I’ve rewritten and updated my best-selling eBook, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to
thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop
