Where to Invest In Property

What Area Should I Buy Property In?

To a certain extent, this depends on your available working capital. If you only have £25k to get going with, then you won’t be investing in London, even if you live there.

We will determine which route suits you the most when we do a deep dive into your personal Investment Blueprint, but I want to cover some of my thoughts on the subject here, considering the following topics:

  1. Why you should invest locally (if you can).
  2. Why heading somewhere unknown increases your risk.
  3. Choosing an area method 1: The Concentric Rings approach.
  4. Choosing an area method 2: The Relationship Factor.

This article will provide you with the tools on how to decide what area to focus on.

Investing Locally vs. At a Distance

In an ideal world, you would invest locally. It makes sense on many levels:

  • Time: Much quicker and easier to visit estate agents and attend viewings.
  • Knowledge: By definition, you are going to know your local area very well. You will know the prime areas, the good areas, the areas to avoid. You will know the locations of hospitals and any other large, local employer. You will understand the type of people that live there. You may already have a network of decent tradespeople who have worked on your own home, or will have friends that can recommend people.
  • Proximity: Whilst you don’t have to self-manage, there is some security in being very local and able to pop round to look at something or manage an issue.

But if you live in an expensive part of the country, then you will need considerable working capital to get going. If your primary driver (your Why) is income, then you might struggle in expensive areas where returns are naturally lower.

So, the temptation is to start looking further afield. One trend has been for southern-based investors to flock north in search of higher returns, given that property can be much cheaper for a given rental income. But this carries considerable risk:

  • Time: You should always view a property. If you have a 6 hour round trip drive, you are going to be spending lots of time in the car and are looking at spending your weekends and holidays viewing property (not to mention the extra cost).
  • Knowledge: Buying remotely in a location you don’t know means you have a lot of ground work and due diligence to undertake. What are the good and bad areas? What are the tenant demographics? Where is the demand and for what property type? How will you build a team of trades people? How will you find someone reliable to manage it?
  • Proximity: When you are a long way away, you are very dependent on having a competent, reliable and trustworthy agent to look after your investment. Not all letting agents are created equal. How will you find this person?

Don’t necessarily be attracted by potentially high yields that some northern locations look to offer. This is because a gross yield is vastly different to a net yield – the actual cash you bank!

Property Investing - Gross Yield Explained

This can be affected by:

  • Demand: A low-demand area can mean high void periods. This kills your yield.
  • Tenant demographic: A high-yield location often means your tenants will be in receipt of Local Housing Allowance. This means any issues with their payments and the lack of savings mean they are in immediate financial trouble, with obvious implications to paying the rent. No rent is clearly not good for your net yield.
  • Absolute cash flow: High yields sound great, but are often on low value property. The net profit, in terms of absolute cash flow, might be lower than a comparable investment property down south.
  • Growth: Very generally speaking, high yield means low, or zero capital growth.
  • Relative cost: A new boiler in a cheap property is about the same price as a new boiler in an expensive one. But the low rent in the cheaper property will mean it could take much longer to repay that capital outlay.
  • Maintenance: Depending on the tenant demographic, low value properties can attract tenants who create more wear and tear on the property, leading to higher maintenance costs.

So, be careful in being seduced by heading north in search of high gross yields. The reality of what you collect in net yield could be very different.

What is the solution if investing locally is difficult and investing in some unknown place further field is high risk?

My suggestion is you consider other locations, using one of the following two methods.

Method 1: Concentric Rings

This method is about discovering affordable areas closest to where you live that makes sense from a property investment perspective.

To discover such areas, start with your current location and move outwards so that you start to encapsulate other towns and cities in concentric rings outwards from your home and consider those as possible investing locations.

If you were to draw a ring from your location that represents up to an hours drive from where you are, you will be surprised at how large an area that covers, especially when you take into account how far you can get with good travel networks such as A-roads and motorways. There are bound to be opportunities within that, where the travel time is kept to a minimum.

Thankfully, you can used this great tool for working out your concentric rings based on travel time and see what potential investment areas that gives for further research.

Method 2: The Relationship Factor

Think of other locations you have some relationship with and hence knowledge of. Examples might be:

  • Other places you have lived.
  • Where you grew up.
  • Places you have friends or family.
  • Places you visit often due to work or hobbies taking you there.

Such places mean you are not starting from a position of zero information. You will have some knowledge of the place, plus some contacts to draw on for local knowledge, recommendations for tradespeople and even a spare room to crash at when doing property viewings.

The exact location you pick will depend on your Investment Blueprint, but for now you have some idea about what the inherent risks are in doing so and how you might minimise some of those risks through the Concentric Rings and Relationship Factor approach to choosing an investment location.

Note: There is no reason why you cannot have more than one investing location (I do). In many cases, it can make sense to do so (especially if you are trying to invest both for income and growth). However, if you are just starting out I would limit myself to one location if possible and with a maximum of two. Just because each location is effectively doubling your workload of everything you need to do.

There are also advantages to keeping the number of locations to a minimum and building cluster portfolios in each. For example, you get some economies of scale (think property inspections) and have some leverage to build good contacts with local agents and tradespeople (as you will have multiple properties that will need attending to).

I would strongly caution against a scatter-gun approach and amassing a portfolio all over the place, just because you thought it a good deal. This is a management nightmare and should be avoided at all costs! The chance of you making a bad decision is multiplied as you cannot build the level of local knowledge required to make consistently good decisions. A bad property investment is a very costly mistake!


You should now have an understanding on why you should start investing locally if you can. If that isn’t feasible, then you can try the Concentric Rings approach and the Relationship Factor route to narrow it down. You should try and avoid investing somewhere totally unknown, due to all the risks outlined above.

In my own case, my property is predominantly split between Swindon and London. This is because:

  • I used to live and work in London and so I know it well. It was how I originally got started, by getting a Consent to Let on my own residential property.
  • Up to university, I grew up and lived not far from Swindon. So I have some appreciation of it and have family still living locally, which helps when needing recommendations (the Relationship Factor).

But note that I now live in Hampshire, for lifestyle reasons. So it is perfectly possible to build and manage a portfolio non-locally to you, if that is what you need to do.


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