Investing in a Single Neighborhood vs Spreading Out Your Investments: Which Option is Right for You?

As property investment is considered fairly low-risk compared to other types of investments, an increasing number of Americans have begun investing in property. If you’ve already bought an investment property and want to buy more, you’ve probably considered where you should be investing next?

Here’s something to think about, you should consider investing in multiple properties in the same neighborhood or diversify your portfolio by spreading out your investments to maximize your profits. Please continue reading to discover which option is right for you.

Benefits of Investing in a Single Neighborhood

  • Makes a 2nd Purchase Easier: If you have been managing a property in a particular area, you already know the neighborhood; however, you should also be familiar with your local laws, tennent demands, taxes, and insurance fees. This type of knowledge is very beneficial when buying another property in the same neighborhood.
  • Offers Good Returns: Buying another property in a neighborhood that has already been established as having a good ROI and cap rate is always a good idea and offers good returns on your investment. When you own a number of properties in the same market, it also creates positive cash flow. However, equally important, make sure you’re getting a fair market price based on the property’s location.

Benefits of Investing in Multiple Neighborhoods

  • Lowers Your Investment Risks: There are many reasons why diversifying your portfolio is emphasized in relation to any investment. Whether it’s stocks or property, diversification lowers your investment risk. Although the housing market is not as volatile as the stock market, there is always the very real possibility of negative changes in the market. These can come in the form of natural disasters, such as tornados or earthquakes that can create extensive damage to your home coupled with pricey repair bills. Alternatively, these changes can also come in the general depreciation of the value of a neighborhood. What once was a respectful neighborhood may no longer stay or be that way in the future. Moreover, by spreading your properties out, you are minimizing your potential losses and lowering your investments risks.
  • Future Appreciation: By buying multiple properties in different areas, it is almost guaranteed that the price of at least one of your properties will greatly increase in the future. This is due to new infrastructure and regeneration projects being built in the area, specifically designed to breathe life back into that location. For example, if a new mall is built near your home or if a new canal or garden is created close to your location, the price of your home will go up. To fully capitalize on this aspect, you should be looking into noteworthy future architectural changes and other projects taking place in the areas that you to invest in.

Why Hire Professional Property Management Services?

If you’re still unsure about which option would suit you better, you should hire Premium Business Investments to let us help you with your property needs. We will analyze the market and come up with the most suitable plan that meets your requirements. Investing can be tough, so let our experts take care of the nitty-gritty for you by contacting us today and discover a wide range of options that’s right for you.