This is paraphrased from someone else that I was talking to who was giving me some advice. I thought it was really useful, maybe not right away for us. But maybe in the future, but defiantly worth writing down.
He was saying that you should be careful of one horse towns, by that he meant small towns with only one big employer. If the town would devastated by that employer going out of business then it maybe risky buying rental property there. This goes along with knowing your market, but this is more then just knowing the school zones and the expensive / trendy areas. It is a little more then location, location, location!
If you know the main employer in your little town is in a good position and that it will not go out of business easily then there can be some real bargains to be had in small towns. I live in a relatively small town, and from talking to people looking for rentals around here it can be difficult to find good quality rentals. Investors tend to stick to the bigger centers, at least in NZ, small towns can offer good opportunities but I think the research burden is higher then in the bigger cities and towns.
There is more room for error in a big center, this is one of the reasons that we brought in a city for our first rental.
These are just my thoughts helped by some good advice from a fellow investor, I encourage you to do more research as these are big decisions and they will be with you for years to come good or bad.
Feel free to leave comments, I am keen to hear your thoughts or advice, I am always looking to learn or discuss thoughts with others.
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