Real estate brokers generally have particular neighborhoods in which they work, rather than an entire city. Brokers refer to this as a “farm” area. You’d be wise to adapt a similar approach to your real estate investing business. The goal is to become an expert on one specific farm area, roughly 3,000 to 5,000 homes. In some locations, this will be easy because the homes are divided into subdivisions or developments.
You’d be wise to learn the neighborhood inside and out and become familiar with every detail about it, including home values, schools, zoning, homeowner association restrictions, local shopping and developments, and failed communities.
Values—Become familiar with the high and low range of the neighborhood. If all the homes are similar and were built in the same time period, this task should be quite easy. You should be able to rattle off value estimates almost instantly upon hearing a few pertinent details about a particular property in your farm area, such as the style and size of the home. In older neighborhoods (usually 50 years or older), a particular geographical area may have a wide variety of homes, making it difficult to determine values. Novice investors should avoid these areas until they have more experience.
Schools—Schools are an important factor for people with families who are considering moving to an area, particularly elementary and middle schools. Get to know the choice of local schools and which ones are most desirable
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