The advantages of investing locally

Many investors and groups of investors only invest locally. Perhaps most importantly, many investors only invest with local directors. At the same time, there are many very successful companies operating on a national level. While that is true, the practical reasons for investing locally are sound and need to be considered carefully.

Investing locally provides the opportunity to understand the fine nuances of your community or city. In fact, I heard one investor tell another about investing in a major East Coast city looking at properties street by street because sometimes a good street can be just a block or two away from a bad one. For the investor knowing how to choose the property in the right place had everything regarding whether or not it could be successful in its market. While these points may not be true in your market and may be exaggerated or may be interpreted as exaggerated, the fact is that local investors who know their markets very well often do much better than outsiders who approach with capital and resources only to discover that your investment stalled later.

Markets are made or destroyed by a variety of very subtle influences. Investing locally allows you to understand where school district boundaries break. You know which schools do well on tests and which do not. You learn where the best access to employment is. After a while, you know almost innately how development plans look and how they will evolve over time in relation to the property locations you may be considering for acquisition or the areas you are targeting for development goals. draft.

As an operator, years of working in a market gives you insider knowledge on the least expensive way to complete new construction, repair plumbing, repair electrical, repaint a unit, install new carpet, put in new windows, hang doors and so many other items. For outsiders using the city administration, often the manager feels that he can slip some elements past the owners and investors. The opportunity for abuse can be great.

For smaller investors who don’t have the time, resources, or capital to institutionalize processes, gain scale for operations or supplies and services, and other needs, investing locally overcomes many of these shortcomings by providing the investment opportunity that only a lot of capital could afford. more significant could achieve otherwise.