Find where to Invest

Hello, today is all about finding the right location where you’re going to invest. If you’re a new investor, this is for you as I believe that one of the most significant decisions a real estate investor needs to consider is to select the right location to invest in. You can change many things, like decoration and the aesthetics of a property, but you can’t change its location. It’s important to conduct plenty of due diligence before you decide where you’re going to invest. In this blog, we will examine what you need to consider when selecting a location. How to choose a location, like where people are buying properties and fixing and flipping, or a location that is popular for rentals, you will first have to decide what is right for you.

The first location I recommend you look at is the area you live in. Your local area will give you a baseline of how to move forward with any future properties if that’s what you choose to do. As a first step, it’s imperative that you understand the market that you live in. If it’s a city, the suburbs or the countryside, find out how each market works and it’s needs. Its advantages and disadvantages. Are there universities close by? What is the jobs situation in the area? Is the city growing? Are people leaving or arriving? Is there a shortage of jobs? There are many, many things to look at, consider and evaluate. I will be uploading a new video soon outlining some of the factors that will influence your decision.

Another thing to consider is if the market price is too high. If so, you may have to search in a different area out of town. If you cannot do it locally, maybe out-of-town will work better. But the first thing is to analyze a few properties within your neighborhood. Cities are large, and you may have a different analysis in each one, and the properties might be valued differently; I have seen many times, two or three blocks away, the property could have a completely different price, sometimes close to half the price, so you need to evaluate the city you live in closely. Work out its variation and differential; maybe other neighborhoods will give you a different price range as some are closer to transport links and schools.

When you have identified the location, it’s time to start moving forward. When you conduct a few analyses of different properties within your city, you may decide this is the way to go. If it’s a location, you can invest in and within your price range. For example, I live in Toronto, Canada, and the prices here are high, making it difficult to get into the market, especially if you’re buying or investing in property. Remember you will require at least a 20% down payment and if the property price is high, depositing 20% is difficult. If you’re going to be renting that property, it doesn’t cover everything, so most likely, you will have a negative cash flow. So my advice is to do your research to determine your strategy going forward; whether it’s fix & flips or rentals, it’s got to work for you.

After completing a few property analyses and deciding a particular area is not for you, you need to look elsewhere. You may start looking out of town, or you might look at locations where it makes more economic sense to invest. Always remember to consider the time commitment when deciding where to invest. Another factor to consider is the site location; how far are you willing to travel? Some things can be done online with specific properties, but it’s best to make a few trips, even once a month, or maybe more often when you do a fix and flip. Just getting a new tenant in or if you need to do repairs will require visits to the property. So that is the first step that I recommend you do now.

Location, location, location is the mantra we use in real estate as it’s the most important factor. Where you’re going to buy has to work for you. I see many beginner real estate investors wanting to invest in their city, but sometimes depending on where it is, it might not be the most accessible place to start investing in. Figure out your baseline, whether it’s your home city or elsewhere. Another thing you want to consider is if you are going to stay in that city for a short period because of work commitments, or maybe you are getting married, and your partner lives in a different place. This could be an excellent opportunity for you to evaluate the other city that you will be moving to if you know that it’s going to be within a short period of time, like one or two years. So you can start creating your real estate team before you move. It could be the opposite, that the place you’re going to go live is very, very good for investing, but the place you are in is not. So that is another thing that you want to consider.

Another factor to consider when you are analyzing as a new real estate investor is to always measure a single-family home; usually, three bedrooms and two bathrooms would be your baseline in the city. So you can compare the same type of property to other locations to understand what the difference is. This is dependent on where you live, as in some cases, the baseline could be condos or student accommodation. So you need to examine what sells best in your area for most of the population, as this is the baseline you want to consider when looking at other areas. If you want to stay in your local market, even though it’s expensive, you can wait a little longer to accumulate more money. Otherwise, you could find two or three friends or investors that want to participate in the project and split the profits.

If you want to explore other markets outside where you live, the best thing to do is to determine how far you are willing to travel, depending on your time commitments. Right now, if you’re working full time, maybe you have the weekend off, and you may want to use the weekends to conduct your real estate investing. When you start a new fix and flip, you will need a little more time. With my investment properties, one is about an hour’s travel for me; the other is close to five hours. I’m okay with the distance, but it may be different for you. You can start by using this website, it provides a lot of data, and you can find some interesting facts about the city or town you’re looking at. If you draw out a radius you are willing to travel to on a map, this will help identify locations within the circle. 

Now you have some key information about how to get started in selecting a location. My next video will feature thirteen things you need to consider when researching a city or a location for investment. If you have any questions, please have no hesitation in contacting me or leaving a comment below. Until next time invest wisely. 

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