Published:

11/16/2018 09:31am

What Does "Location Location Location" Really Mean in Rental Properties Investing?

What Does "Location Location Location" Really Mean in Rental Properties Investing?


When looking for rental properties, investors ask themselves the question: "what am I looking for?

Location is the first criterion that allows the decision-making to be focused. It allows the search for investment properties to be narrowed down to a certain geographic area. Zooming in on a specific location allows the investor to become an expert in this area by becoming specialized in a certain city or community. This empowers the investor to better understand the factors that determine local property values and rental rates. An important lesson I learned from my mentor: Location determines the price of a property, all other things being equal. The wise investor will choose a location first and then pick a property.

“Location, location, location” is the slogan used in almost every reference on real estate investment and even on retail businesses. My mentor taught me to turn this cliché into an actionable process for choosing a great location. He told me to write down the word location three times and to underline the letter C in each of the words. I ended up with three Cs. He told me that the Cs in location, location, location refer to country, city, and community respectively.

My mentor explained that getting clarity on those three Cs will enable me to narrow down my search criteria and start identifying great deals by looking at the different properties within my selected location. He emphasised that the most important of the three Cs is the third one, which is community. Investors, who become experts in a certain community, will be able to compare local property values and rental rates, which will enable them to identify great deals from the average ones.


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