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Checking Out Local Property As An Investment

Right now, I’m sitting in a small local bank, waiting to speak to a loan officer?

I need to start making the proper connections, so I thought I’d get pre-approved for a mortgage as a first step by making a connection for my property purchasing plan.  Since I’m not entirely sure what I’m going (I’m still reading up on the process), I thought it would be best to test the waters with a small local bank just to get my feet wet.

I just recently drove through an area that I’m thinking of making a purchase and I thought I would describe it.

It’s a small (less than 4,000 total population) town that based around an resource mining company.  I’m sure most of the population is employed by the few local companies that are mining the earth for their manufactured product.  Driving around, I noticed a high amount of rental properties scattered throughout the small manufacturing town.

Even with a lot of rental properties, I didn’t notice too many “for rent” signs in the town.  I’m thinking that there could be a lot of renters in the area.  Driving around the area I’m thinking of buying, they people all seem like they are nice, happy looking people.

Although the neighborhood I’m looking at seems decent, I did notice that the neighbor across the street has a sign on his garage that says “Drunk Drive”, and there are a lot of plastic chairs and a big fire pit in the yard…  That might mean that perhaps they do more partying that I would like, but who knows.  Most likely, I’ll do a couple of weekend drive-bys to see how bad it really is.

10 Responses to Checking Out Local Property As An Investment

  1. I’d go one step further. Find a house that interests you and then knock on the neighbor’s doors to talk to them.

    You’ll quickly be able to assess what kind of neighborhood it is and if it’s a transient place or not. I did this several times and most people are surprisingly willing to share what they know with a perfect stranger. If you bring a 6 pack, you might got a lot more info from the sounds of it…

    • That’s a great idea, especially since I just noticed that a tree branch from the neighbor’s house is practically touching the roof of the rental property I’m looking at!

      lol, yeah perhaps a 6 pack would help! 🙂

  2. What do you mean that driving through you saw a lot of rentals, but not a lot of for rent signs? How can you tell if it’s a rental or not?

    Try talking to property management companies to get a feel for whether rents are in high demand or not, trends, renter preferences, etc.

    • Poor wording on my part, I really meant to say duplexes than rentals. I’d say at least half of the units on the street were duplexes.

      thanks for the suggestion about property management companies!

  3. Sounds like if the mining dries up you are stuck with a property and absolutely no renters? Why are you getting pre approved if you don’t know where you are buying? I only ask because you are taking a credit inquiry hit and will take another one (or 4) if you don’t find a home before it expires.

    • Good point on the credit hit! I’m kind of floundering right now, trying to carve my way through the muck. The real estate agent I’m working with recommended that path.

      It’s always that way for me though, the first time doing something new like this is slow and inefficient, but then next time I’ll be three times as fast…

      The mining city has some nice elements that make it a nice area to live (like an excellent golf course/country club). It’s secluded but close to a major highway. I’m not sure if I’ll buy there or not, I might try to pick up a foreclosure in my city instead.

  4. I think I would get preapproved by the biggest bank we could – one that is everywhere. Then do your shopping where the best rentals are – cities that are growing and have lots of blue collar and white collar workers. Then, when you pounce, you can get the best rate possible from places like small banks. 🙂

    • Sound advice, very sound!

      My area isn’t growing at all, so although all the books say try to find property 30 minutes to 1 hour away, I don’t see much growth potential, I think it would be better to go where they growth is too. I might by my first property local (just to figure out if I enjoy it or now), then pick an area that better growth prospects.

      I didn’t think of going with the largest bank for preapproval, but that makes perfect sense 🙂