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  • Buy-to-Let

    10 reasons to buy investment property within a 10 mile radius of where you live.

    Opinion is divided on whether you should invest close to home, or further afield if the yields are more attractive.

    I'd like to hear what others think.

    My personal view is that, for a novice investor, it's best to start close to your home patch. It will also be determined whether you are self-managing or using a fully managed lettings service.

    Here are my ten reasons to invest close to home:

    1. You know the area and feel comfortable with it. You know which streets to avoid, which are the good schools, where the transport links are etc ... and nothing beats "local" knowledge.

    2. You can spend time walking the area, building relationships with local estate and lettings agents. Property is a people business, and knowing the right people to support your property journey is absolutely vital. Nothing beats face to face contact and building rapport with people who can advise and support you.

    3. You can take time to view other rental properties in the area as part of your due diligence and get a feel for the market and standard of housing being offered, so that you know where you are going to position your property in the marketplace.

    4. You can visit prospective properties at different times of the day to see if they are affected by noise, parking issues, school run/rush hour traffic etc.

    5. You can network at local events with local landlords to learn from them.

    6. If a bargain property does appear the market, you can be one of the first to view.

    7. Once purchased, if something goes wrong with the property or the tenant you can be on-hand to deal with it. If you are having refurb work done, you can check on it regularly to ensure it is proceeding smoothly and on schedule to the desired standard.

    8. You don't have to rely on a third party's information and can get facts for yourself. I once heard of an investor who had a flat up north that the lettings agent told him he could not let out. The investor was in the area one day and decided to pop by the flat.
    He found that the letting agent had given the flat to a lady friend so he could visit her easily!

    9. Investing close to home allows you to self manage, saving money on lettings agents commissions and increasing your monthly net cashflow as a result.

    10. It doesn't matter if you forget the keys. You can pop back home! Smile

    [Image: house.png]House Critter was hoping to slope off early as it is Friday, but he's managed to find these related discussions:

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    [Image: 4995468760_6be86655d4_t.jpg]
    general operations director, site owner and moderator - propertytribes.com

    Hi Nick

    I agree with all of your reasons and that's the way I started.

    Just to play Devils Advocate though, some people can't afford to invest locally. For example, many people in London look elsewhere as London is full to bursting and the effects of supply and demand have taken their toll on entry costs to the market.

    The BBC have relocated to Salford due to this problem and that's having a major impact on that area. Will London based investors follow the BBC perhaps?

    Will other big institutions look to relocate for the same reasons?

    Where are the property hotspots outside London?

    I could write a thousand more questions and just as many answers about knowing who to trust, managing from a distance etc. etc. but I'll leave that to others to ponder and debate.

    This could be a very interesting thread to follow.

    All the best

    Mark Alexander
    Founder of Property118.com
    CHECH OUT OUR FREE PORTFOLIO REVIEW SPREADSHEET
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    Regards


    Mark Alexander - Property118.com
    Twitter: @iAmALandlord
    (22-02-2013 05:12 PM)Mark Alexander Wrote:  Just to play Devils Advocate though, some people can't afford to invest locally. For example, many people in London look elsewhere as London is full to bursting and the effects of supply and demand have taken their toll on entry costs to the market.

    As a total novice this is the situation I found myself in. My partner and I, are not quite at the point of wanting to leave London. So, whilst we would love to invest 10 mins down the road and experience all the joys of local investing, I don't think it will be feasible.It's a conundrum :-(
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    I've just bought my first property and I agree with all the points in Nick's post. My property is a 5 minute walk away.

    As I'm doing the much of the refurbishing myself, this has proved to be very convenient when I needed a tool or something from home.
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    Regards Freelancer
    I am a control freak. All of mine are within a 10 minute drive of my home. It brings peace of mind but also saves so much time and financially I have also saved well over a six figure sum over the years by self managing and streamlining stuff by having adept problem solving skills.

    I`ve looked at Bulgaria, France . Holiday lets , the north , America etc etc and even 10 miles up the road.
    But its a no no and I always scuttle back to the safety of my home town to invest
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    Jonathan Clarke. http://www.buytoletmk.com

    My experience is that local is far more profitable in relation to HMO's as it is difficult to find good managers/letting agents for multilet who will aim for full occupancy and keep maintained. The number of calls per tenant seems higher than single lets.My HMO at distance I end up accepting lower room rates than I would normally just for an easy life, whereas locally I can be a lot more fussy.

    Single lets seem to be more manageable at distance with a good agent although local to me is much more desirable for all the above reasons . But I guess this has to be weighted up against yields / special factors influencing capital growth of an area , discounts to market value
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    I can tell you one very good reason for investing close to home.

    You will grow older.

    In my early days I did not mind a 2 hour drive to one of my properties but now I don't even want to drive for half an hour because that is an hour on top of the time I am at the property and if I do need something from home it is a long drive back. Call me lazy but most of my properties are within a 15 minute drive these days and some a short walk and this has allowed me to continue to self manage and to keep my eye on contractors when I am doing a refurb.

    In my opinion all landlords needs to be, what Jonathan calls ,control freaks because the buck stops with us and we must never forget that.

    Follow me on Twitter@landlordtweets
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    Follow me on Twitter @landlordtweets

    I think you should buy what you know - you may have just moved to an area so buying there may not be a good idea - however if you've lived somewhere else previously for a long time and know it well then I dont think there's any reason not to... e.g. I was born and brought up in Liverpool - lived there 30+ years so know it fairly well and would be confident buying there - also know agents etc who I'd be happy managing properties.. other people I know who've bought in Liverpool without any knowledge have ended up making big mistakes.

    The reason that we live somewhere may not necessarily make it a good area to invest in .. however I do agree that if the area you do live in and have a good knowledge of is a good area to do BTL then thats ideal.

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    Still all good points and I agree with them all.

    Still playing Devils Advocate though, what about putting all eggs in one basket?

    Imagine if you had lived in a Northern mining town in the the 70's and invested 100% of your funds into local housing?

    Most of mine are in Norwich but if Aviva (formerly Norwich Union) were to close down this would have a devastating effect on our local economy.
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    Regards


    Mark Alexander - Property118.com
    Twitter: @iAmALandlord
    Perhaps I should start a thread entitled "Reasons NOT to invest within a 10 mile radius ..."?.

    1. All eggs in one basket (as Mark indicated above).

    2. Area might not have high yields.

    3. Area might have high crime rate.

    4. Area might have unpleasant smells.

    5. Area might have high level of anti-social behaviour.

    6. Area might not have good schools > not appealing to families.

    7. Area might have poor leisure amenities.

    8. Area might be way out in the sticks where not many young professional tenants want to live.

    9. Area may be over-saturated with rental properties.

    Any others I have missed?
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