Does distance matter?

[Jared Baker]

I have been looking online at various sites to find deals.  I see a lot of decent properties to could be potentially good investments, I haven't run any numbers yet, but my question is does distance matter?

Should I try to find all my deals in on certain area, ie. pick a city and say i won't go any more than 20 miles around it?  Or, does it matter if I get one deal in one city and then find another 45min away in another city?

[Peter Mckernan]

Hey @Jared Baker that is completely up to you, you can pick one place and the next purchase can be in another city across town! It really comes down to if you want to cut down on drive time and also save time. 

In the long run I would say pick one city and push your chips into that city until the market in that micro climate changes. Once the market changes and it does not make sense pick another city that the market works with your numbers.

[Bob Okenwa]

For sake of travel costs and becoming an expert in one market, you should try to stick to one place, preferably something close. Bouncing around different cities or states isn't very efficient as it makes you a jack of all trades and a master of none. Focusing on one spot is key and allows you to learn everything you can around one city and you only have to worry about one set of laws, hopefully only one realtor, one property manager, etc. No need to over-complicate the process. Stick to one spot and become an expert in market trends, demographics, and neighborhoods.

[Michael Noto]

@Jared Baker It can be tough as an investor to learn multiple markets at once.  The investors I know here in CT that are the most successful have one niche strategy they execute and they execute that strategy in an area they know like the back of their hands.

The sooner you can zero in on a strategy and an area you want to execute that strategy in the better off you will be. 

[Joe Villeneuve]

Yes, most emphatically it DOES matter...but not for the reason you may think.  The distance is a result of the market choice...not the other way around though. You don't pick your market based on how far away it is from you...you pick it based on how close it is to the Property Profile you generate from the Criteria that comes from your REI Plan that is in place to accomplish your Financial Goals.

In other words, your financial goals are going to dictate the properties you need to find, and thus the location you invest in will be based on where those properties are found.

Now before you say, "What if I'm flipping?  Isn't it hard to flip from a long distance?"  Well, yes and no....maybe.  All that means is you aren't going to be doing any of the physical work yourself (which you shouldn't be doing anyway...but that's a whole other topic).

...and, before you say, "What if I'm holding? Isn't it hard to manage properties from a long distance?" Well, yes and no....maybe. All that means is you aren't going to be doing any of the property management yourself (which you shouldn't be doing anyway...but that's a whole other topic).