Real Estate Investing is About Location, Location, Location

by Monica Mutuma

(This is Real Estate Millionaire student's Monica's third post in her series of 12 articles. Post 1 & Post 2 can be viewed on our website)

In the last few weeks I have been, and am still doing, research for a good location for an attractive real estate investing opportunity.
 
I must say researching the markets has turned out to be an eye opener.  I took Dave and Julie's advice of looking around in areas I am familiar with.  This has led to several discoveries, the main and most surprising one being that I do not know my town as well as I thought I did!  I have discovered little areas tucked away in corners in familiar suburbs.

The other thing is that doing real estate investing location research takes up time and effort - notwithstanding real estate agents who think I'm ready to sign up just because I've gone to view a show house!
 
I have also established that in Harare there is an area referred to in the real estate sector as the "golden triangle".  This is a fairly large area in the north/north east part of Harare bounded by three main roads leading out of town, forming a rough triangular shape.  Within this triangle are a number of residential areas which are considered to be prime and are generally for the upper end of the market.  Here the properties are high value and naturally command high prices.  Rentals are also high.  However if one were to invest in this area one would also need to realize that maintenance costs would be a major factor as properties are generally kept in pristine condition.  This would mean that even the tenant one would select is of high calibre.  Talking to one real estate practitioner they confidently stated that one "cannot go wrong" by buying into this area.  But as mentioned before prices of properties here are high and might be beyond a beginner's reach.
 
I am personally interested in a residential area which is adjacent to the golden triangle to the North West.  This section is so popular with buyers and tenants alike that I was surprised when I initially discovered that this suburb is not within the triangle.  On further research it turned out that this area enjoys its popularity from its proximity to the central business district.  It's about ten minutes drive from town and public transport is easily accessible.  Despite this area not being in the prime area, it can be a good area to invest in.  A tenant could comfortably have the choice between driving and also using public transport.
 
Within this suburb, one is within easy reach (in some cases walking distance) of several primary schools, two high schools, several hospitals, restaurants, banks and several movie houses.  In addition there are many sections which carry flats including garden flats so it's a good area for students, newly weds, small families and retirees.  I was not able to get up to date figures on employment, for example, but talking to people who live here, they would not consider living anywhere else because they enjoy a life of convenience.  As a result property prices in this area are on the high side and so are rentals.  In the absence of figures on vacancy rates, I decided to move round in the zones devoted almost exclusively to flats and ask if there were any vacant unit up for rent or sale.  The result was that most units are taken up almost as soon as they become vacant, whether for sale or rent.  One could safely conclude that one could buy in this area and get a tenant within a reasonable period of time
 
My goal is to buy a house or garden flat for my first property.
 
Here in Harare we have an area bordering the CBD known as the Avenues area.  This area is mostly taken up by flats and town houses.  It's also an area of high demand and prices tend to rise as one moves further away from the CBD.  In the Avenues there are some very exclusive blocks where rentals are higher even than the golden triangle.
 
Again it's an issue of convenience and security.
 
A good number of people who live in the Avenues are able to walk to work.  In my moving around I came across properties which are so posh that some of the owners are prepared to leave the properties vacant for a few months while they look for the "right" tenant.  This is how highly some of the owners value their properties. 
 
As I continue with my research one thing keeps coming up.  Convenience is considered to be a major requirement- good public transportation and proximity to amenities.  For me this will also be a key factor in deciding which property and in which area to buy.  Meanwhile the research continues.
 
Note from Julie & Dave: It doesn't matter whether you're investing in properties in the USA, Canada, or South Africa - tenants want the same thing: convenience. Always ask yourself where the tenant will work and play and how they will get there. Think about the children they might have and where they will go to school, and once again, how they will get there! Monica has uncovered the secret to real estate investing success and we're so proud at the innovative and persistent ways with which she is using to uncover the very important market information she needs to make a good buy!! We hope you follow her example!

Published on October 22, 2009

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