Property investment and development is usually best approached in one of two ways. You can either go further afield to find “cheaper” land values and – possibly – less competition, or you can focus on your own back yard…..stay in your patch.
Based on cold, hard experience, it’s fair to say we would always favour the latter. And when deciding where to invest your time sourcing and developing sites, there are a few factors well worth bearing in mind.
Time is the most valuable asset you have. We all have the same 24 hours, so how you use that time to the greatest effect is really the game changer here.
Even in a perfect world, property development is hard enough. Travelling around meeting landowners, agents, valuers, QS’s – building up your network at the early stages of your career – can eat up a lot of time.
Add to that the desktop research, evaluating the findings from your viewings, liasing with your relevant network and the crucial importance of time management becomes ever real.
(And we haven’t even considered your social or family life yet!)
The further you have to travel, the more time (and money) you are spending and potentially wasting. This cost cannot be ignored.
Whist property Investment and development is essentially a people business, at the end of the day knowledge is power. Knowing an area and the people in that area “like the back of your hand” uncovers the best opportunities.
In most instances the best opportunities go to the people that have first-hand access to what is happening in a local area and community.
Locals will know which site is coming up due to a vendor’s recent change of circumstance. By the time that insider information has travelled to the next town the deal will have been snapped up. If it hasn’t been, it’s a deal you really want no part of.
Effort is directly related to points 1 and 2. In the UK you can be in pretty much most places in up to 4 hours. Yet the time it takes to travel 2hrs or more one-way every time you need to visit a vendor or a site can be draining. Even sitting on the train for 4 to 8 hours a day can suck the energy (and eventually enthusiasm) out of you.
The effort required to gain a working knowledge of a new area can be agonising. To really get to know the local agents, contractors, planning officers and committee members to name a few, is not an easy job. Building worthwhile, fruitful relationships will be strenuous.
If these relationships are close to home, with local commonalities and points of reference, you’ll naturally build a rapport faster and easier.
Scalability relates to all the 3 points above and must be take into account when starting any business. As a rule, if something is taking much longer and requiring more effort than realistically anticipated, it’s likely that you’ll struggle to grow it.
Start small with a view to scaling later when you have traction. It’s best to make and learn from mistakes at an early stage so that you can avoid them later.
Find ways to laterally shift your business model. If the core business has legs, there will be other opportunities that emerge organically – take them!
In summary, if you’re ambitious and your ultimate aim is to build property nationwide or even internationally, it’s highly advisable to start local. Become the go-to in your own backyard and scale your business from that hub then add bodies and systems as necessary.
If you’re in an area where you’ve had success, the best thing to do is double down in that area. Put yourself at the forefront of all the opportunities that arise from that location. Stay in your patch.