Keeping up with the Joneses – would you rather own the Joneses’ property, or one with a faceless tenant hundreds of miles away?
Whilst you may wish to take a hedging approach to your property investment, by investing in different property markets, you may be more interested in what is the other side of your hedge…
An article published recently in Property Observer in Australia questions whether it is preferable to own a buy to let property in your neighbourhood or in another area.
Owning the Joneses’ home
The benefit of owning a home in your local neighbourhood, is that you are familiar with the local property market, and as a LandLord, it is far easier to manage a property in the local vicinity. The downside of this as a homeowner is that you already own property in this market, unless you can guarantee that your postcode is the most profitable postcode in terms of rental yields and capital growth for the foreseeable future, you are “putting all of your eggs in one basket.” Furthermore, when your tenants drive past your home in a Rolls Royce, would you feel satisfied or resentful of the Joneses’ wealth, or would you feel inclined to unfairly increase their rent?
Many landlords enjoy what they do, and enjoy nurturing their home, and seek pleasure from others enjoying their efforts as a LandLord and property owner; however, as a CrowdLords style investor does it not make more sense to see your investment as a list of numbers; returns, income, capital growth etc, rather than the house on the corner of your road?
Unlike other investments, property is not something that a lot of us remain detached from. Much like the character-filled Victorian terraces whose closely knit environment encourages community, many of us like to be involved, acting like a co-operative, to enable more people to live in our neighbourhood.
The Australian article points towards investment across states, in spite of the different legal infringements that may arise. If you do not own your home, the benefit of owning a share in property in an area that you would like to live in offers obvious benefits, chiefly, having some of your savings directly tied to your desired property market, ensures that your funds are in alignment with any price rises in the area that you would like to buy into.
When investing in property, there are many benefits, however, location location location depends on your situation alone.
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