Should you invest in property that is close to home? This is a frequently asked question within the property world. Here on the Property Investors Podcast episode 42, Russell Leeds and Alistair Cunnigham share their knowledge of the subject.
The Property investing duo agree that there are many benefits to investing in property that is close to home, this being said investing further afield can also be extremely successful, if carefully thought through. There is no hard fast rule on where, or how far from home to invest, and what works for one investor may not be suitable for another. But there are three key points that should be taken into account when contemplating any investment.
- Whether there is a good ROI, return on investment.
- Whether the investment fits within your strategy.
- Whether the investment fits with your cash flow.
Good knowledge of an area is essential when deciding which properties will be successful as HMO’s. An individual automatically has this knowledge when investing in their home area. However, although more time consuming, it is possible to learn this knowledge of other areas. Also you do not need to be an expert in every area and having a trusted group of people who have this knowledge can make investing away from home successful.
Most HMO, house of multiple occupancy, or R2R, rent to rent landlords do not want to physically manage their properties, but rely on a trusted team to do this. Having a good team in place makes investing away from home easier as the day to day management of lettings, tenants etc does not require an investor visiting the property, thus eliminating the requirement to travel.
In summary, it is not essential to invest in property near to where you live, but there are many benefits of doing so. If you are deciding to invest away from home, it is essential to have a trusted team to manage your property. Choosing a “Patch”, or area of investment can make your properties more niche and specific and eliminates the need to know every area. Most people invest away from home in order to source cheaper property, Rent to rent deals should always be close to home, as you are not actually buying property meaning the property value is not relevant.