I have found that a property investor can often miss a great opportunity simply by the strategy they decide to take or by not shrinking the size of the area in which they prefer to invest.
Know Your Area
You will have heard the expression, “knowledge is power” and when you shrink the size of the area in which you want to purchase you will become an expert in the area and know exactly what is happening with real estate in that area which then allows you to make quick and accurate decisions.
I am talking here about an area that is no more than say, 2 Km square.
This is a great strategy for the person who is very busy and possibly chooses an area near where they live, in which to invest, because they can drive around this area on a regular basis, take notes and keep data on what is happening, then pounce when the time is right. Not only should they drive the area but once every month or six weeks they should walk the area and get chatting to residents.
An Example Of How This Strategy Works
There is nothing like being able to see for yourself what is happening in the area in which you are interested.
I know an investor who recently bought a property to live in with the intention of doing a fairly extensive renovation. The interesting point here is that it is in a suburb that was originally built on about 28 years ago and a good percentage of the surrounding houses are rentals and in only reasonable condition. The suburb is slowly being renovated and property values will continue to climb as the suburb becomes a more attractive area to live in.
From the investors point of view I can see them purchasing in and around this area as there is a lot of potential and not only will they increase the value of their rental properties, but of their own property as well.
Although this is the extreme where the investors will be living in the area, you can see my point in that they will know on a daily basis about properties that are coming on the market, when rental signs go up, they will get to know residents in the area and will often be able to get information about properties that are going on the market before they are actually listed.
This is how investors make extremely profitable purchases. By buying off the owner they can often make a saving of about $10,000. Not a bad pay back for keeping in touch with your target area.