Local, Local, Local
Everyone knows the old real estate phrase: “Location, location, location.”
Location is such an important element of any real estate purchase. It plays a huge role in the value and future resale of every piece of property. So of course you should consider locations carefully when you are investing in real estate.
But what’s also important, at least when you’re first starting to invest, is that you keep it local, local, local.
While there are many different ways you might invest in real estate, let’s break it down into the most common ways you’ll most likely invest:
You’ll buy a property to renovate and resell fairly quickly (AKA “flip” a property).
You’ll buy a property to hold onto as a rental property.
Either way, it’ll be in your best interest to have whatever type of investment you make pretty close by.
If it is a property you will be “flipping,” even if you won’t personally be doing any of the work, you’ll want to be at the property quite a bit and make sure that the work gets done well and as quickly as possible. If you have to drive an hour just to get to it, you’ll lose valuable time and may not be able to get to it as often as you should.
If it’s a property you intend to hold onto and rent out, you’ll still want it to be close by just in case you need to head over there for an emergency and to keep an eye on the property in general.
Plus, it’s easier for you to have a firm understanding of the values in your own area, as opposed to an area you’re not familiar with.
So try and focus on finding the best investments possible in your own area. But if you have a reason to invest in an area further from home, at least account for the potential costs of doing so.