Location location location

Location location location - known as the 3 most important factors when buying a property, and it is easy to see why. The location of your property dictates how much yield you get, and how much capital growth, which ultimately decides how well you do.

And yet people still get it wrong...

Most investors only consider location location location within the area they live ... rather than asking themselves where else they may gain even better and higher returns.

It may seem to make sense to invest in a location near to you - you can pop in to check on it, help fix any problems, and keep eye on local market better.

However, this approach to property investment could be costing you thousands, or even tens of thousands of pounds, euros or dollars in lost opportunities in the long term.

Compare this to professional property investors, who own property all around the country they live in, or even all around the world.

By asking themselves "Where can I buy property that will give me a great return?" instead of asking "What's available down the road?", they stack the odds in their favour. So location, location, location truly becomes critical.

Investing in property is all about the numbers, this is something I realised very early on - forget about whether you would like to live there or whether the property is down the street from you.

Instead, what I pay attention to is:

The likely return - yield, and capital growth

Buying costs and selling costs

Cost to borrow money, ie interest rates

How attractive the property will be for likely tenants/buyers.

So how do you recognise a great location?

Factors that suggest growth include:

1. Growing, developing economy eg Countries entering EU, regenerated towns

2. Demand outstripping supply ie more people want property than can be supplied, usually due to increased numbers arriving which could be due to higher birth rate, high numbers of jobs created, lower prices than similar properties else where.

3. Low cost of borrowing – if interest rates are very low, people are more likely to buy, in particular for buy to let, as will be confident can cover all costs and make good yield.

This is why more and more UK investors are looking overseas - to growing economies and location location location, such as the new EU countries.

See more of our thoughts on these at Property Investment Overseas - with recommended location location location

Also make sure you have signed up for our free 7 part course on the "7 Fatal Mistakes to Avoid as a Property Investor" below which has more detail on key points to be aware of when choosing the correct strategy for you - underataning opportunity cost, importance of cashflow, and why location, location, location is so vital!

To ask myself or one of our team a question on investing, call us on 0115 9474155 - we are based in Nottingham, if you are passing, pop in and see us! Or email us at info@property-investment-tips.com

We also send out a free newsletter every 3 weeks to over 7000 property investors, with tips on strategies, where to buy - including location location location - recommended books and courses. You can sign up, for free, below, and you will also receive, for a limited time only, our free 7 part course on the the fatal mistakes to avoid as an investor.

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