Should You Buy An Investment Property Close To Where You Live?

a lot of investors especially newer investors want to purchase an investment property near where they live there's a lot of benefits to that but there's actually a lot of risks and negatives associated with that as well so if you're wondering should i buy a property near where i live or should i invest somewhere else today i want to give you some pros and some cons to help you think about it and make that decision for yourself hey i'm ryan from on property helping you on your journey to financial freedom and i remember growing up as a kid my parents wanted to invest in property and so they looked within the very suburb that we lived in so cronulla here in sydney beautiful beachside suburb they had purchased their own home in the area they were looking to buy an investment property and they ended up purchasing a unit in cronulla they owned it for a couple of years i think it was negatively geared ultimately they ended up selling the property at a loss unfortunately and didn't make any money off it now that's not to say that happens to everyone a lot of people invest near where they live and have great success but how do you know whether you should invest near your home or not what are the benefits of doing it what are the negatives of doing it and why do so many investors go to other suburbs or other cities or even interstate in order to build their investment portfolio so let's talk about that first let's talk about the pros which are probably a bit more obvious one of the benefits of investing near where you live is that you know the area and we will come back to touch on this in one of the negatives because you know the area and what it feels like you know where the good streets are you know where the housing commission is you know where the good cafes are and all that so you're familiar with the area chances are you like the area and you like living in it and other people do as well so there's a benefit there in that you know the suburb but one of the negatives which we'll come back to is just because you know the suburb from living there doesn't mean you know the data associated with that suburb and how it's going to perform in the future just because you want to live there doesn't mean that that suburb is going to grow in value into the future but you do know about it you can avoid some race because you know about the suburb itself other benefits of it that it's quite easy to inspect properties because they're very close to your home you don't have to go very far on a saturday or after work in order to inspect them and it's also possible for you to check in on your properties i think this is why a lot of people want to invest near their home so that they can check in on it actually the street that i'm in right now there there's a guy in this street who owns a house just you know one or two down there and he actually bought the house across the road so right across from me now so he he owns both and he's rented it out and he can see what's happening in that house now finally he's going to develop this property and so it's been rented out to a bunch of let's just say youthful boys and some questionable things go on at that house but he's just renting it out until he's going to knock it down and develop a i think jewel or triple occupancy home there so like a duplex and a granny flat there but yeah he owns in the street every single day he can see what's happening at that house that's an extreme example if you can check in on your property and so that might help you sleep better at night knowing that you can drive past it and see you know doesn't look in decent condition and maybe that would help you to avoid some of the issues like ben had if we talk about ben's property horror story which is absolutely hilarious i'll link it up down below and i'll put like a snippet in here so you can hear a little bit about his horror story three weeks ago i get a call off a mate who's living in sydney um and he's like turn on the local news and i'm like what local news i live in queensland man he's like i just turned on the central coast news and i just saw your property i think you could call your property you know the footage was from like a crew on the ground and a helicopter type thing just to set the scene for where where this is going um so i've called my property manager and she's like yeah i was gonna call ya um something's come up um effectively the saturday before i got the call um some police were called to the house because apparently there was two illegal tenants living there that had actually had a knife fight like this is how it started like i'm like where are we eliminated like this is a knife fight um so they've had a knife fight and they've busted up some windows and the neighbors have called the cops in and the cops have come in and must have seen some others just have some sketchy stuff some sketchy stuff um so they've walked into the property um and gone okay we have to come back so you know a couple of days later six detectives rock up with the drug squad and have gone to break gonna break the door down effectively and you know have warrants for people's arrests in the house um during that time of knocking on the door for some reason the granny flat that's been there for 15 years catches on fire catches on fire um calls undetermined by the police and the fire department so no one knows how caught on fire yeah um you know timing-wise logic would say to me um and so these cops have effectively gone to end of the property and couldn't because the granny flats on fire so they've caught two fire engines they've come out put the fire out and then they've sectioned off the street and the cops have gone into the property and there's eight adults living in the house apparently like heavily drugged up let's just say that they've all gone running and the police have managed to catch four of them so they've got them in handcuffs next to the cop car i didn't realize but the neighbors have all been in conflict conflict for a significant period of time apparently like my property managers never told me any of this stuff so i'm like obviously something's been going on that you know just we had no idea about effectively and um basically guys in cuffs and one of the neighbors gets a fence paling and another one gets a cricket bat and then they start attacking attacking people like that are completely cuffed up and you know the cops have had to call for backup all of a sudden there's like 15 cop cars and like 40 policemen there and everyone in the street has now begun fighting police fighting the tenants oh my god like just a full-blown riot and that's where you hurt up too right yeah so yeah ben had this property on the central coast that ended up being i think a meth lab or something they burnt down the granny flat oh he just had a nightmare with that property if it's close to home if you can drive past it you can start to see some of those problems earlier really a real estate agent should probably pick up on that anyway but being close to home you can start to see that and also there's the benefit of is if there's minor issues with the property you may be able to go and personally fix those issues yourself so maybe it's plumbing issues maybe something needs to be painted or something needs to be fixed rather than paying a handyman to come out in order to fix it you can actually go and fix it yourself i know my partner lives in a property and the property owner is in and around sydney and so he'll come in and inspect the property himself every now and then she's got a personal relationship with him he actually owns a kitchen company and so put in a new kitchen for her when he really didn't need to the old one wasn't that bad so she kind of got lucky having an owner who lives close and having a good relationship with him even though she goes through a real estate agent but he can come in inspect it see what needs to be done and maintain his property up to the standard that he wants it's easier for him to do that than going into state so there's obviously some benefits to investing where you live otherwise people wouldn't do it but i think really when it comes down to it the benefits mainly are emotional based like you think about it you're like okay yeah there's these practical things that financially i don't have to hire a handyman or i can check in on this sort of stuff or whatever but really i think it comes down to emotions you feel safer investing in an area that you live in because you feel like you know that area you feel safer investing somewhere you can drive past because you can check on it which helps you be less anxious about the property so it comes down to those emotions buying in an area that you live most of the time unless you live in an area and you know the data and can identify this is actually going to be a great area i think most people do it for emotions and if you're thinking about buying near where you live have a think about and say okay am i actually fearful am i just investing in the area that i want to live because i'm anxious about investing elsewhere or i don't know how to research anywhere if you're feeling those feelings then maybe that's an indicator to you not to okay be fearful of everywhere else but to say all right i'm understanding that i'm scared because i don't know how to invest somewhere else then go and learn how to do that learn how to pick your markets learn how to do your suburb research learn how to you know work out what a suburbs like where's the good spots find out how to discover where the public housing is like all of this stuff you can learn and it's one of those skills that you build up that's going to make you a better investor so if you've got those fears maybe channel those fears into actually educating yourself building up your property investment skills that can make you a more sophisticated investor and then maybe you apply that to your own suburb and ...