Boomers-Bank IRA-401K-Real-Estate Investing

Location, location, location. You always here people saying that so and so person’s building is a success because it is located in a prime place. Location somehow seems to determine a financial gain or loss for the majority of investors. However, what most people tend to do wrong is to limit their interpretation of the word ‘location’ to simply the physical location of the property in terms of what other facilities are available nearby, such as hospitals, transport, schools etc, etc.

Instead, when the word ‘location’ is used, it is vital to think of what the location has to offer to the investor than just simply what it will offer to its tenants. Hence, while it’s all well and good to see how the location will play into the life your tenants, you as an investor also need to see what the location does for you.

In this regard, when you are looking for a property to invest in, keep in mind that it should be in close proximity to your home or workplace. Such a location will thus give you the ability to drive past the property numerous times a day. This point is further amplified by the fact that when you are in the initial inspection stages of your investment, you will need to go back and forth to the property many times. Hence, by having a property which is in close proximity to a location you already visit daily, will allow you to benefit from a world of timesaving. Remember though, that you should try and approach the property from as many different routes as possible as this will further increase your familiarity with the area.

Similarly, when you are picking properties to invest in, you should try and keep them within one location. By keeping your properties within one city or one jurisdiction, you reduce the amount of study and research times. Moreover, you make life easier for yourself as this way you only have to make yourself accustomed to one set of rules and regulations. Furthermore, given that you will be required to attend regular community meetings, a single area ensures that you don’t have to do too much running around. That said, you should nonetheless not be discouraged from venturing into new areas completely. Once you become expertly familiar with an area, you can of course move to new cities and jurisdictions. Be warned thought that you will need to restart your education process by learning the zoning ordinances and building codes for the new area.

The next point is similar in principle to the previous point and yet is different as well. You should not identify a location that contains over 200 investment options. Ideally, you should try and narrow down your search criteria between 100 to 200 properties. This way you ensure that you don’t overwhelm yourself by the sheer number of work and inspections you need to carry out. For the same reasons, ensure that you narrow your focus to two or three different types of properties instead of tens of types. Again, by doing this, you would save yourself a lot of added work and valuable time.

Lastly, you need to make sure that the area you invest in is well-defined in the sense that it falls under a specific zone in a city or a jurisdiction, so much so that it should at least be part of some natural boundary. This way you will be able to easily obtain information and carry out your research pertaining to the location.

All said and done, once you’ve picked your location you should be ready to become an expert in the area. You will need to grasp as much knowledge as much as possible about the community. The more you learn, the more your chances of success.