Why Location, Location, Location is Wrong

Location is important. But not the most important thing. To be secure, you need to be able to hold property. What do you need to be able to do that?

Why Location, Location, Location is Wrong

Location is important but it’s not the most important thing in real estate or property investing. Why is that?

If you just focus on the location, what’s going to happen? You could find a really good property in a really good location. As fantastic as that is, what happens when the market moves on you? What happens if you can’t sell when you want to?

Then the location doesn’t matter. You’re stuck in an investment you don’t want.

What’s more important?

Cash Flow, Cash Flow, Cash Flow

Markets go up and down. That means that you could be in a position where you buy property and the market moves and you have to hold it for some time.

If you’re buying a property with the goal of speculation, you could lose money holding it or selling it. You’ll be in a lose-lose situation.

Being successful in real estate means holding property for a long time. If you’re able to hold the property for a long time, you will make money.

You need cash flow to be able to hold properties over the long term.

Ratios

Let’s say your income is 1.3 times your expenses. Your income is $1,300 a month and your expenses are $1,000. That’s a safe enough bet. In this situation, even if the market turns on you, you’re going to be okay. You’re going to survive.

A 2:1 ratio is even better. You’ll be very safe if your income is double your expenses. It significantly reduces the risk of your investments.

The Number One Question

Will this property make me money?

Obviously, you need to be in a good location. But that’s secondary.

If it’s in a good location but doesn’t give you cash flow, it is a bad deal. That’s why location, location, location is wrong.

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Sunil Jaiswal

Investor & Entrepreneur

After building a multi-million pound portfolio in the UK, he realised that he could add more value to the lives of people by helping them think out of the box, giving them knowledge and confidence to make intelligent decisions.

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