A key point of Keeping your investment local or spreading out into multiple markets.
Pros of Keeping it local.
Cons of Keeping it local.
Pros of Multiple Markets
Cons of Multiple Markets
There is a checklist of pros and cons, these are just to get you thinking outside the box so you as the investor can consider the upside and downside for each property/market. If you understand and plan for the positive and negative of each asset, you may reduce any potential negative impacts on your business and can re-adjust the strategy.
These are strictly the opinions of myself based on Q&A with various investors of multiple asset types.
Pros of Keeping it local.
- You are able to take a day drive around and put your eyes on the properties. For some people being able to easily see your properties put them at ease.
- Contractors/Maintenance. When you have all your properties in one area, you will have a list of trusted contractors and maintenance people. If there is an issue you know your proven professionals will be there to handle those issues.
Cons of Keeping it local.
- Natural disasters. Certain areas are more prone to earthquakes, tornado's, hurricanes, and floods. If there is a major event how may this impact your investment?
- Employment. If your area has one or two major employers and the survival of the local area is dependent upon these employers to your prospective tenants to survive? (Example) The major coal towns of Pennsylvania and West Virginia. If the local employer is to reduce in size or close altogether how could this impact your numbers?
Pros of Multiple Markets
- Taking advantage of the various landlord/tenant laws and economic benefits. We all know certain municipalities/states have guidelines/laws that make Multi-tenant investing more supportive.
- Spreading risk through different markets. If one market is declining for a reason, the other markets will hopefully not be affected by the same issues.
Cons of Multiple Markets
- The need to travel to put eyes on the property could be negative or positive depending on your personal preference. There would be an additional cost to account for when you need to travel.
- The need to have a database of multiple team members that may include but not limited to contractors, property managers, and attorneys.
There is a checklist of pros and cons, these are just to get you thinking outside the box so you as the investor can consider the upside and downside for each property/market. If you understand and plan for the positive and negative of each asset, you may reduce any potential negative impacts on your business and can re-adjust the strategy.
These are strictly the opinions of myself based on Q&A with various investors of multiple asset types.
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