Why where you live is probably bad for property investing

You can invest in the highest-profit areas wherever they are

Many beginner investors make the same common mistake when property investing for the first time. They buy near where they live, without considering other locations. It’s natural to want to invest near to where you live, but you are unlikely to make market-beating investment returns. You might love where you live, but it doesn’t mean that it will attract the highest number of potential tenants.

To find the best residential investment property, you will usually have to look further afield than around the corner from your home. By widening your property investment search, you are more likely to find the location that equals property investment profit.

In this article, you’ll learn how beginner investors can get into the rational mindset of professional investors and reach their financial goals faster.

Why do beginner investors buy near where they live?

Beginner investors go with what they know. When it comes to location, they know where they live. They love where they live. It suits their lifestyle, their purpose, and their pocket. They can’t imagine why anyone wouldn’t want to live there. They buy near their home convinced that the investment property will let easily.

How do tenants and home buyers differ?

Remember, buying a home and property investing are very different beasts. A purchase of a home is often a purchase for life. It’s where you see yourself living now and in the future. You might want a garden, garage, and enough bedrooms to raise an expanding family. Tenants want different things. They may be looking for a property to live in for a few years, but not for 20 years and more. They are more likely to want to live near transport links, and with bars, restaurants and nightlife on the doorstep.

Demand for rental property is key to buy-to-let success

Once you have eliminated emotional bias from your property investing psyche, you’ll be in the mindset to make better, more profitable investment decisions. For example, where you invest should be dictated by long-term tenant demand. And this demand is dictated by property fundamentals such as shops, schools, transport links, major employers and major investment.

Locations that provide these in abundance will attract population growth. And a growing population increases demand for homes, and this pushes capital growth and rental prices.

The ‘how?’s  that all beginner investors ask

There are three questions all beginner investors ask as they move from an emotional bias to a professional investor mindset:

  1. How do I know that where I buy is one of the best places to invest in property UK?
  2. How do I know tenant demand will support my buy-to-let investment in the long term?
  3. How do I manage an investment property that could be hundreds of miles away?

It may be that you are already thinking about these questions as you read this. If you are, that’s a good thing. It means that you are already adjusting your mindset from emotional to rational. The next step in the transition from beginner to professional is to answer those three important questions.

Get educated to find the best places to invest in property UK

Where you buy is the most important decision you will make when property investing. To make the right choice for your investment objectives, you need to get educated about the rules of the property investment game.

Education takes time, effort, and usually a fair amount of money. Of course, the returns available on property investment make all this worth budgeting for. However, I’m a great believer in free education. If a beginner investor is prepared to put in a little time and effort to learn, Gladfish will provide the education freely:

  • The Gladfish Academy is probably the largest single property investment education resource on the Internet today. Everything you need to know about investing in property is explained in plain English through blog posts, articles, books, webinars, videos, and more.
  • Also, your experienced property consultant here at Gladfish will be available to provide help and guidance as you build a highly profitable property portfolio.

Do your research and due diligence to ensure tenant demand

One of the greatest advantages of investing in property is that you don’t need to spend years in property education to get started. By partnering with experienced property experts with a great track record of helping others to invest profitably, you can get started in no time. However, you’ll still need to be confident that the location and property in which you invest will produce the returns you expect.

It is where research and due diligence is needed. You’ll need to make sure that the location benefits from all the property fundamentals that drive capital appreciation and tenant demand. You’ll need to consider factors like demographics, population growth, and the type of tenant who will supply the demand.

If this sounds like hard work (and it is!), don’t worry! We provide all our research free of charge. Our unique Hotspots Algorithm interrogates 108 data points across 324 UK areas. We’re so confident of our research that we provide off-plan property guarantees that cover rental payments and property valuation.

Take advantage of effortless property management

The most successful property investors concentrate on the process of investment and leave property management to others. An investment property manager with a national presence is ideally suited to manage a growing and geographically-spread property portfolio. They will find, vet and review tenants, as well as check your properties regularly, collect rent, and arrange for maintenance to be done.

Take the first step to a successful and profitable property portfolio. Contact one of the Gladfish team today on +44 207 923 6100. We’ll be happy to discuss how you can begin building a property portfolio to achieve your unique lifestyle goals.

Live with passion,

Brett Alegre-Wood

Brett Alegre-Wood
July 20, 2017

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