Buying a property without knowing where you are investing is akin to buying a car without knowing anything more than the color. If you are considering spending your hard earned money or precious time, you would be wise to know everything about where you are investing. This goes beyond just the individual property or immediate area. The property holds one piece of the investing puzzle, but a bigger piece falls with who you plan to rent or sell to. If you are considering investing, you need to take the time and put the work in and know everything you possibly can about your respective market.
Nothing will get an investor into trouble quicker than buying blindly. You may be in such a rush to move forward with a deal that you forget or overlook your due diligence. Technology has made investing in real estate much easier, but nothing will replace seeing the property and getting a feel of the area for yourself. Spending an hour in your car or reading the local newspaper can help you avoid taking a bad deal. If you knew that one of the few schools was closing next year, would you still invest in that area? How about if taxes are scheduled to increase in the next few years? These are basic items that every investor should know before they get involved in any deal.
One of the reasons this can be difficult is that the target market can be too big. Your target market should be relative to the bulls eye on a dart board and not the dart board itself. This could be one specific town or one county within a state that you have done your homework on and feel you know better than anywhere else. This will allow you to make quick decisions when an opportunity becomes available. If your target is too big, things can become muddled and you will find yourself moving forward with properties you don’t really know anything about.
A lot can change within a town from one street to the next. Just because you have bought in that town in the past does not mean you know the property surrounding area. If you are networking properly, you should be able to call an area realtor or fellow investor to get an initial feel. That should be your starting point and not your final decision maker. Once you have an idea of where you are buying, you need to dig in and look at past sales, pending listings and if there are any changes on the horizon.
The better you know your target market, the greater the chance is that you will have success on a given property. If you have down time you should be researching or even driving the area. Opportunity usually comes to those who are most prepared and there is always information you can be gathering where you want to invest. Your target market should be your sweet spot and an area that you can turn to find deals in a pinch. Know your target market like the back of your hand and your business will be rewarded.