Week 29: Location, Location, Location
Hello everyone it's that time of the week again, hope you didn’t miss me too much..hahaha. Last week we covered management agents and this week we will look at how to research a particular area. As I explained in my blog last week the first and foremost task is to decide if you want to manage the property(ies) yourself and this will lay the foundation to how you go about setting up your property business. Because we decided that we would rather delegate this task then we can pretty much invest anywhere in the UK (provided the numbers stacked of course). We weren’t limited to one single area or province.
So how do you go about picking your area?
What makes a good investment zone?
What should one be looking out for?
Okay, because this will be our very first investment property I wanted it to be somewhat close as during renovation I wanted to be available in case something went wrong. Although not local to me, the area is about an hours drive from where I live (perhaps more at peak traffic). With experience I can branch out further afield. I chose this area as it showed great potential and had a number of hot spots to play with. So what do I mean by hot spots? The town has not one but two great universities in and nearby. One of which has a university hospital with another two hospitals close by. The area is made up of a cluster of towns so you have more than one high street at your disposal. It also has good distribution centers and business parks so plenty of businesses at your doorstep. Has great infrastructure and transport links within the city and excellent highway/railway systems connecting to major cities on the outbound. It's very centrally located as Birmingham is just an hours drive to the south, Manchester an hours drive to the north and Sheffield a bit further out north east of the region. It has a great mix of people from young & growing families to working professionals which happens to be my chosen niche. So that's a quick look at the geography of the settlement.
The very first thing I did was to look at the Wikipedia page for that city. I absolutely love Wikipedia it tells you so much in a nutshell and then you can research further the bits you want to. This gives you an overall snapshot of the area in terms of demographics, culture, history and the political make-up which is so important. I then looked at the city council's main website for the city to research and any developments in the area. All this could be found on the planning page of their website. It gives you an idea whether the area is contracting or expanding. It's the latter we are interested in. If there are plans for a new Tesco in the area, or perhaps other large retail centers and an entertainment complex is on the agenda, then you can assume the place is expanding and it’s reasonably safe to move forward. The area has shown a steady increase in capital growth with house prices rising ever so slowly however, don't let this put you off as the area has great rental potential thanks to the two uni’s and the sheer accessibility of the region itself. We are aware that property prices are a bit slack, however, our aim right now is ‘cash-flow’, which shouldn't be a problem given the fact that the area is showing signs of strong rental demand (more on how to work this out next week).