Here are 4 benefits an investor will have when they focus on investing in a smaller target area:
Spend less time on research
By focusing on a smaller area, you will ultimately minimize the amount of time you spend on market research. Obviously, it takes less time to research a 3 square mile area than it does to research a whole city or zip code.
Truly Master the Area
Spreading out your resources to larger target market or to multiple smaller areas will only give you a basic understanding of the market, compared to spending that same amount of time focusing all of your energies on a single, small area. In doing so, you will truly master the area in no time.
Also, due to the decrease in market size, you will be able to increase the frequency of driving for dollars, and you will have the ability to meet with more of the area’s sellers and investors. As a result, you will consistently be up-to-date with the market values and understand the area inside and out.
Have a Better Understanding of the Competition
By concentrating on a single smaller area, along with meeting with the local sellers and investors, you will be able to see when properties are being purchased, when the property goes back on the market, and what it is being sold for. Therefore, you will also be up-to-date on what the competition is doing. It will be much harder to keep track of all of this information if your area is too large or spread out.
When you eliminate all of the time consuming activities from having such a larger target area, you can take all the extra time to become laser focused on other aspects of your business.
Use the extra time to become educated on areas like the fundamentals of real estate and real estate law. Take the time to become the most competent investor by knowing the market values and market rents better than anyone in your area. Or, simply take the extra time to spend with family and friends!
What are some other benefits to having a smaller target market that you can think of?Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action