The above statement may seem obvious but is often overlooked by eager investors looking for a deal. It can be a costly mistake.
Whether you want to quickly “flip” a property for profit or buy a property to let in the longer term for a cash flow return you must know your area. You need to meet a demand that is not catered for.
It can take several months of research to finally decide on the best area that fits your strategy. What you need to do is “Data Mining”.
This is done by firstly using online sources to check the locality for properties that are within your budget and also confirm that the rental demand is there.
Next a phone call or e-mail to Estate Agents asking about prices and availability of the types of property you are looking for should be done.
Repeat this with lettings agents in the area to confirm rental values for the property types you are targeting.
Once you have this basic data you need to visit the area and walk the streets to confirm what you have found through your online “Data Mining”.
If it matches up to your original ideas, great. You can start selecting properties that you would like to view and maybe make offers on them.
If not you need to look at other areas that may fit your strategy? These may be close by, in another county or geographical area. If so the process for “Data Mining” is the same.
The initial research online, contacting local sources and then visiting the area to see if your findings hold true.
If after several attempts you cannot find an area to fit your plans it’s time to re-examine your first thoughts and strategy to see if other ways of investing in property can meet a demand.
“Data Mining” is part of the hard process of Due Diligence that the investor is responsible for when investing in property. It should not be left to anyone else to do as the investor will lose or profit by the quality of information they gather to make a decision.