Over the years, the team at Embrace have met a lot of successful investors and there has often been one thing that has linked them all together. The common trend seems to be that they have built profitable portfolios in one, maybe two areas. This is not to say I have not met people who have invested successfully in lots of different areas, but on the whole the majority have focused their efforts on a particular area, usually fairly close to them. Ideally when looking for your own ‘goldmine’ area, you should be looking for an area that is no more than ten to fifteen miles away from where you live, or at most a half an hour drive.
Three reasons why choosing a local ‘goldmine’ area is important:
- It is easier to manage, benefiting you both financially and time wise.
- You can spend quality time building a network of agents, tradesmen and property professionals who will form a solid part of your team.
- You will get to know the area well, knowing the true value of properties, and also which are the best ‘goldmine’ areas within your chosen areas.
A lot of investors are looking for a promising area to invest, which will suit their individual strategy. It is important to note here that promising does not mean the most expensive or cheapest area. Promising means a place where people would like to live and this can be for a variety of reasons, and is essentially down to the strategy you have chosen, and the tenant type you are aiming at.
You should be asking yourself when looking at an area:
- Where in your town has a special appeal?
- If you are in a commuter belt, where has good transport?
- Where are the good schools for young families?
- Where do the students want to live?
Asking yourself these questions might sound over simplistic, but they are one of the most important aspects of a successful buy-to-let investment purchase or career. By defining your exact strategy you will have clarity and will ask yourself the questions that are relevant to what you are personally aiming at.
Defining your property investment strategy is hugely important, as over the years at Embrace we have seen many people look at a strategy or area that works for someone else and try and replicate it exactly. Whilst this is achievable if it is right for you, I have also seen other people get frustrated that it has not worked for them as well, but it simply could be that the tools they would fit a different area or strategy. It is vitally important at the start to work out what area is right for you primarily, which will stop you looking elsewhere and using a scattergun approach.
- Peter Iwaniszewski