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Today’s holiday short comes from Adam, who asks: I'm just looking for some advice/guidance on finding my investment goldmine area. I would just like to know what method(s) I should use for deciding on the best investment area for me. I feel semi-confident about assessing an area but where do I even begin looking?
My Checklist: proximity, suitability, alignment, market temperature & return criteria.
What’s that all about then?
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Resources mentioned
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Transcription of the show
Hello, and welcome to another episode of The Property Voice podcast. My name is Richard Brown and as always, it’s a pleasure to have you join me on the show again today.
Today’s holiday short comes from Adam, who asks: I'm just looking for some advice/guidance on finding my investment goldmine area.
My 5-point Checklist: proximity, suitability, alignment, market temperature & return criteria. What’s that all about then?
Let’s hear Adam’s story and see how I responded to the topic of finding your goldmine property investment area now then…
Property Chatter
This comes from Adam…
Hi everyone.
I'm just looking for some advice/guidance on finding my investment goldmine area. I would just like to know what method(s) I should use for deciding on the best investment area for me.
I feel semi-confident about assessing an area but where do I even begin looking?
Thanks in advance.
Adam
Richard’s Response
Hi Adam
Whilst I hate the term ‘goldmine area’, I get your point!
To start with, I would follow these general guidelines...
Proximity - if you plan to visit site, then make it close to where you either live, work or have solid contacts in place (e.g. family)...I suggest up to 60 minutes travel time as being the most for a hands-on approach, unless planning to visit site frequently, in which case up to 30-45 mins each way to avoid falling asleep at the wheel.
Suitability - it then needs to fit in with your planned strategy. So, for example, if you plan on developing holiday rentals, it needs to be an attraction or hub for short-stay guests (beach, national park, major city centre, etc.). Or if say an HMO strategy...forget Cleethorpes, Skegness or Blackpool for example, which are not really ideal for that strategy (the reasons why would be evident if you look closely).
Aligned to your finances - I like Kensington and Chelsea quite a bit...but I don't invest there, as I prefer to work at a lower affordability price point personally.
Market - check supply and demand, economic and demographic factors, time on the market and yields / return expectations and grade them according to your criteria...which you need to know in advance
Returns - linked to the above, set some criteria in terms of ROI, cash required, etc. and then measure the areas against these using some test projects or generic data.
Long-List to Short-List…This exercise will give you a little focus to compile a 'long list' of potential areas. Once you have this list (say 10-20 possible locations as there are over 200 towns and cities with population >75k for example), you can then rank them in a way that suits you best (e.g. a scoring system) and then brutally whittle them down to 3-6 to then visit, walk the area and meet the agents and other contacts that would support you there.
Then, take your pick!
Tip: you will find several areas that COULD be suitable, then keep an open mind...I invest in multiple locations for example. However, if you want to build a reliable team that can simply repeat execution on project after project and wish to go deep rather than wide, then focusing does make sense yes. Personally, I have a wider approach to areas due to the fact that finding suitable deals becomes easier for me and the way I work with a wider catchment area, but everyone has their own style.
Hope that helps.
Best
Richard
Update from Adam…
Hi Richard.
Thank you for taking the time to reply and help me out.
This advice was very helpful, I have made up my list of possible areas and am now going to go through the process of researching each area. I have followed your advice and it has helped me to at least start looking somewhere. I will continue to follow your advice and hopefully it also works well for me.
Thanks again.
Adam
Well, wasn’t that nice of Adam to return to say thank you…but most of all, it seems to be working for him, so that’s great!
So, that’s my next holiday short…another one is coming up next week.
As a reminder, the show notes can be found over at www.thepropertyvoice.net. Or, if you want to talk about anything from today’s show, or just talk property investing more generally, email me at podcast@thepropertyvoice.net, I would be happy to hear from you!
Once again, all I want to say is thank you very much for listening once again this week and until next time on The Property Voice Podcast…it’s ciao-ciao.