Some investors new to property really struggle with this concept of location, location, location. Although it is a huge cliché it is probably the single most important part of the decision making, a mistake made in this area can ruin the whole possibility of turning a profit no matter how much time and money are sunk into the project.
Some points to note:
A smaller property in a good location is almost always a better bet than a larger one in a bad area!
Many people have fallen into the trap of buying a cheap ex council property and refurbishing it at huge expense turning property into a dream home, only to discover that nobody wants to pay big money for a dream home in the middle of a run down council estate and they find it impossible to achieve the prices they require to make a reasonable profit – however there can be good profits made on ex council properties if the project is chosen wisely.
learn to spot trends in areas both “up and coming” and potentially “undesirable areas”
Signs to look for in up and coming areas ripe for investment are – very few properties for sale, clean streets and shopping areas with little in the way of graffiti and vandalism, close to amenities but not too close, tidy gardens and clean fresh appearance to windows and external woodwork and fascias.
However bear in mind that although huge profits can be made by investing in areas about to “blossom” this is hard to do and even professionals can get caught out. Sometimes an area can be devastated in terms of property prices by a seemingly small change that can set off a chain reaction. The classic example is a nice street full of large Victorian houses, children being left the house after parents death decide they don’t want to live in property so they convert to flats and sell off making good profits, this upsets the older neighbours who decide they don’t want to live next to a bunch of noisy students so they decide to sell and move on, however they also come to realise that the best option for them to get a good return on their property is also to split into flats etc etc. Pretty quickly a quiet street full of owner occupiers can turn into low rent “bedsit land”. Signs to look out for are lack of available parking, lots of bells/letterboxes on properties and messy uncultivated gardens, unless you are looking to make a profit by renting multiple single flats/bedsits beware of buying property in these areas!
When choosing area have a clear picture of the potential buyers in your mind
People like to live beside other people just like them, when buying a property to improve and resell don’t think about what sort of area you prefer, think about the who the potential buyers are going to be and the sort of area they would like to live in.