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This chapter is from the book

Picking a Location

As with your job search, there’s no one place to start. Usually, however, you will start in the area where you work or live, picking a property type you understand at a price level you can afford.

You can begin to explore your options simply by looking at maps. (It is amazing how much you can learn by looking at maps—all kinds of maps!) These days, the Internet is making available a wealth of detailed aerial maps that in the past were accessible to only the biggest companies.

You can continue your education by walking or driving around. You can visit apartments, houses, stores, and offices. Try to spot where change is occurring. What areas are in or out? Where are the artists moving? Where are the trendy shops and hot restaurants—the streets with “buzz?” Where are the areas with architecturally interesting structures that might be renovated attractively? What companies, and which brokers, are operating in this area?

Think of yourself as a comparison shopper. You would think nothing of asking the proprietor the price of a particular item in a store. Think the same way about property that goes up for sale. In real estate, it is much more difficult to “find the proprietor,” and you might not know how much to believe when you do hear a price, but it is crucial that you begin to understand value. Thinking simultaneously in qualitative and quantitative terms about a property is not easy, but it is crucial to successful investment. The size and physical condition, the legal restrictions, the rent structure, the availability and cost of financing—all enter into the equation. There may be a big difference between the asking and the real price.

One of your toughest problems, starting out, is deciding which deals are worth spending time to investigate. Especially if you have a day job, this will be a limiting factor. This is why it’s better to focus early on a specific neighborhood or property type where your learning will be cumulative. It is like buying a house. Until you have seen several, preferably in the same neighborhood, you will not have the confidence needed to act quickly when the right deal comes along.

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