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Smart landlords and property investors understand that there is nothing more important than local knowledge.Towns and cities can vary street by street in terms of prices, achievable rents, and desire-ability. Knowing your "patch" will dramatically assist you in mitigating risk.If you are investing remotely (far from where you live), the local knowledge of a reputable lettings agent will be the next best thing to shield you from making a poor investment choice.Local knowledge can be amplified by a local network and attending local networking events.Property Tribes travelled to a BTL seminar in Huntingdon to discuss this with lettings agent Maxine Lester and property commentator Kate Faulkner:
On the topic of understanding your patch, Jonathan Clarke's "10 streets strategy" is very useful in getting to know and area:> Pick 10 streets near you that you know quite well.> Check on rightmove whats for sale and what has sold> Walk the streets and look at them from the kerbside.> Work out what sold and whether it was good value compared with those around> View the ones for sale and delve a little bit deeper as to what is good value.> Knock on the doors of the ones that have sold and offer them £20 to view and chat about their reason to purchase at that price. > Within 1 month you can become an expert in those 10 streets> You will know more about those streets than anyone because no one else has done that exercise.> You are the go to person to ask about value on those 10 streets> If a seasoned property investor came in from a town 10 miles away you are in a better position to advise him/her than anyone else. > Your local knowledge exceeds their experience. You have done the legwork> Use your new knowledge, find a motivated seller in those 10 streets via an agent, leafletting or advertising and you will be able to buy BMV. With local knowledge, you should consider such issues as:> Tenant demand in the area.> Proximity to transport links.Being close to public transport is crucial for tenants. 52% of tenants live within five minutes of their nearest public transport. This rises to 73% if you expand the catchment to 10 minutes.> Digital connectivity in the area.Since 2013, good broadband has jumped from 48% to 57% as a key motivation for movingSee - Slower broadband speed could hinder house prices & rentability ...> Proximity to amenities like supermarkets, leisure facilities, parks etc.> Crime rates for the area.> Traffic around the area.> Noise around the area.> School catchment areas.> Parking in the area.> Proximity to restaurants, bars, pubs, and coffee shops.> Be on the look out for turn off's. See - You know to walk away from a property deal when .... The above is not an exhaustive list. What other local knowledge do you think is invaluable to landlords?SEE ALSO - My 10 streets - granular on investment patchUP NEXT - Location selection - close to home or remote?DON'T MISS - Top 10 Property Tribes resources to learn how to find property dealsNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I couldn't agree more! Local knowledge is everything.
Local knowledge is ideal but not always available. If I'm looking at a potential purchase in an area I don't know well I always do some basic checks first - if I rule it out it saves sending any more time. My go-to website is Streetcheck. It pulls together lots of publicly available info into 1 neat page, with tabs for housing, employment, crime, and more. I find it invaluable.
A random example of an area I saw mentioned in the media recently (the crime stats would concern me if I was looking to buy property nearby) https://www.streetcheck.co.uk/postcode/b54ql
After 30 years in property with responsibilities nationwide over that time, I remain surprised about investors who are so keen to go out of their area. Local knowledge is vital, but there is a limit as to how much can be bought.
My own houses are mainly quite close to home and it makes the whole issue of management (and new purchases) so much easier. I have a good handle as to what is going on, both in terms of my tenants but also with the wider market. I do have some houses about 20 miles away and, whilst it is an easy motorway drive, it can be frustrating at times. For example one is vacant and I am overseeing a full refurbishment. I have been every day this week, with my first appointment there today at 8am, to meet and oversee the various tradesmen. I have had a water leak which required the water company to attend and spent time waiting for them. Agents do not include refurbs in their fees so a landlord either has to pay the agents extra costs, or do it themselves; quite challenging at a distance.
Although we live in a reasonably high value area, our portfolio has performed well. Perhaps we could have had a better yield elsewhere, but being local has worked for us. We have minimal voids and good tenants, who we can readily meet to sort out issues.
Brilliant thread Vanessa, nice interviews and good mini check list on searching.
Local Knowledge is great and investing locally is always a good move as the investor will know the area, target tenants and purely for ease.
My advice to anyone starting out is buy in your area .ie an area within say 20 mins drive max .
Opportunity is everywhere and you can find it close to where you live .
Personally I think it bad advice to advise new , inexperienced investors to buy far away from them as there is a multitude of problems that can arise.
The area I have concentrated in for some 20 years is a small market town and I have created multiple flats above shops ,I live 10 minutes away (6 miles).
I manage the properties myself and this becomes easy when you are close by .
Any refurbishment or issue can be dealt with swiftly and properly by trusted tradesman I have been using for years.
There are too many ‘So called property experts ‘advising on buying far afield and suggesting that you need no money to get started etc etc ....
keep it simple ,invest / buy local , keep focused, concentrate on your plan and slowly but surely you will get there . That’s my advice .......
If i had been organised, I would have noted down over the past 20 years every time I made or saved money by buying local and self managing.
It's hard to calculate the £50 here saved and £50 there I`ve saved when I bled a radiator
It's hard to calculate the saving when a tenant texts you saying they are the sister of one of my tenants and have I got somewhere? .
The DD is virtually done . An LA would charge me £350 if I bought 100 miles away, and rightly so.
That`s their local knowledge and not mine so I pay them for their database of prospective tenants
But the bigger savings are when you buy . 8 people going for a house, only 1 will win the race !
I want to be that 1.
I will put the figure saved by buying local at £100K saved over the years, but it's a wild guess
The buyers may all have the finances and are chain free and good intentions so we are all equal
So I have to have something they don`t . I have to get ahead of the crowd.
I can view in 15 mins most of the time and make a decision often there and then .
I did one the other day and offered asking to secure it .
100% local factors achieved that . I beat others . They may have even paid more
I know the area and I maybe have a little nose at 1am on the Tuesday morning from the outside and on google earth and do my DD .I`m on the phone to the agent at 8am and the MOS is being possibly typed up at lunchtime if the vendor is happy because the agent has endorsed me .A London investor won't be up to Saturday - far to late . They will um and ur and go away and think about it . The local agent I have curry with once in a while would ring me first anyway, not some unknown . They want do to 1 viewing not 8 when its raining cats and dogs . 8 viewings could be 8hrs work and a day is wasted . Why do that when they can spend the saved 7hrs trying to sell something else or seeking an instruction . They work for the vendor 2nd and for themselves 1st.
If that property had been just 20 miles away it just would never had happened.
Please buy local if you possibly can - unless you live in an area that`s going nowhere fast.
No website in the world or algorithm or house price calculator can beat you, yourself and your brain.
Jonathan Clarke. http://www.buytoletmk.com
Totally agree, having properties local is so much easier to manage yourself...
The only part of the article I would be wary of is the "If you are investing remotely (far from where you live), the local knowledge of a reputable lettings agent will be the next best thing to shield you from making a poor investment choice."
Remember the letting agent is also often a selling agent so obviously they are going to try to steer you towards a property they have had on their books a while and cannot shift saying it will be a perfect rental, even if it is not. Whenever taking advice from anyone always think what is their position, have they got anything to gain from giving you that advice, its business after all and most of the time unfortunately everyone has a motive, that motive is often not your best interest.
Local knowledge is being aware that the rather uninteresting building at the end of the road is actually a really noisy night club that goes on till 2am and its patrons jam the road with their cars and its really rowdy when they all spill out. If you view at 3pm on a Wednesday you aren't going to pick that up. (Actual true example)
All good and well if you can afford your local area but for many people living in london like myself we need to look further afield unless your pockets are very deep. My nearest property is 40 mins away Furthest liverpool .
I have no doubt that if i lived in a cheaper area i would have more.
That was why the opening post suggested how you find and use local contacts because you can leverage THEIR local knowledge. That was one of the main points of the article - that if you do not have local knowledge, it is worth paying for as it greatly mitigates risk.