Best Place to Invest in Property: How I Choose an Area
September 14, 2023
The best place to invest in property isn’t necessarily the town with the highest rental yield on a national league table. For me, it’s somewhere I understand well enough to recognise value, judge demand and act on a genuine opportunity.
That might be where you live. It might be somewhere you know through work, family or an experienced local team. What matters is whether you have a useful advantage over somebody looking at the same listing with no local knowledge. A cheaper postcode on its own isn’t much of an advantage.
In my September 2023 video, I explained how that approach led me to buy in very different markets, including Didcot, Northamptonshire and Sheffield. The prices and opportunities I discussed belong to that period. The decision-making process is much more lasting, and it’s the part I’d want a new investor to understand before choosing an area.
You can watch my original video about choosing where to invest alongside this article.
Start with an advantage you can actually explain
When I talk about an unfair advantage, I don’t mean secret information or a way around the rules. I mean something practical: knowing the difference between two neighbouring streets, understanding what tenants want, or having relationships with people who can help you assess a property properly.
One investor might know a town because they’ve lived there for twenty years. Another might have a trusted agent who manages similar properties. Someone earning in a more expensive part of the country might have enough savings to buy in a cheaper area, where the relationship between purchase price and rent looks stronger.
Those are different advantages. None guarantees a good investment. They simply give you a better starting point than buying somewhere because a video declared it the next hotspot.
I’d want to finish the sentence, “I’m buying here because…” with something more specific than “property is cheap”. If I can’t explain the local demand, the likely rent and why this particular property makes sense, I haven’t finished my research.
What knowing Didcot helped me spot
I lived in Didcot for a long time, around fifteen to twenty years, and knew the town well. That gave me a useful perspective when I noticed something unusual: some new-build properties were being offered below the prices of recently completed homes on the resale market.
That’s not a claim that new builds are normally cheaper. Often the opposite is true. It was a particular opportunity in a market I understood. Buyers who needed to move straight away were willing to pay more for a finished house, while somebody prepared to wait could buy differently.
In the video, I described paying £350,000 for a property in Aster Close when comparable completed properties were selling for around £400,000. Completion was about two years away. The waiting period was part of the deal, and accepting it was one reason I could secure that price.
It would be misleading to turn the £50,000 difference into guaranteed spendable profit. The comparison depended on the properties being genuinely comparable, and there were buying costs, finance and a long wait to consider. The point is that knowing the market helped me identify a pricing difference worth investigating.
Local knowledge doesn’t remove off-plan risk
I also mentioned that I hadn’t arranged the mortgage when I first committed to that purchase. That’s part of my experience, not a recommendation to assume finance will be available whenever you need it.
A long completion period creates time for circumstances to change. Mortgage products can disappear, a lender’s valuation can differ from your expectations, and your own financial position can move. A property that looks attractively priced still needs a workable route to completion.
If you’re considering something similar, get the contract, deposit arrangements, completion conditions and funding risks explained before committing. Knowing the area helps with the investment decision; it doesn’t replace professional legal or mortgage advice.
I’d apply the same distinction to any supposed bargain. Being able to spot an opportunity and being able to complete safely are separate questions, and both need satisfactory answers.
How we built knowledge in Northamptonshire and Sheffield
My advantage in Northamptonshire and Sheffield developed differently. I worked with my friend Scott on sourcing, renovating and letting properties, both for ourselves and on other people’s behalf. Repeatedly looking at deals helped us learn the areas and build relationships with agents.
That included places such as Wellingborough, Kettering and Corby. Over time, we became more familiar with what a property needed, what it could rent for and which opportunities deserved a closer look.
This sort of knowledge is cumulative. Looking at one listing tells you very little. Looking at a steady stream of comparable houses, speaking to the people who let them and seeing which projects actually work gives you a more useful reference point.
You don’t have to pretend you know everything from day one. You do need a way to close the gaps. That could mean narrowing your search, spending time in the area and using professionals who can provide evidence rather than reassurance alone.
Why relationships can improve the opportunities you see
In the video, I discussed a Sheffield purchase sourced through Legacy, a business in which I held a minority stake. I estimated that its existing relationship with the seller helped me save around £20,000. That’s my account of that transaction, not a standard saving somebody should expect from using a sourcing service.
The wider lesson is that relationships can change which conversations you’re part of. An agent who understands what you buy may contact you when a suitable opportunity appears or an earlier sale falls through.
Those relationships are stronger when you behave consistently. If a deal meets your requirements, you’re organised and able to move forward. If it doesn’t, you explain why rather than endlessly asking people to send you anything that looks cheap.
A reputation for completing can matter. But I wouldn’t let the excitement of an early call replace the usual checks. The property still needs to stand up on its own numbers, and any sourcing fee belongs in those numbers.
Cheap houses need the same careful analysis
I was interested in the relationship between northern property prices and rents, particularly compared with more expensive southern locations. A lower purchase price can mean a smaller mortgage, which can make a given interest-rate rise less painful in pounds and pence.
For example, an additional three percentage points of annual interest on £100,000 is £3,000 a year, or £250 a month. On £300,000, it’s £9,000 a year, or £750 a month. Those are interest-only illustrations, before fees or tax; they aren’t mortgage quotations.
The comparison helps explain my thinking, but it doesn’t prove that the cheaper property is better. You still need to know the achievable rent, maintenance requirements, management costs and likelihood of empty periods.
A roof repair doesn’t become cheap because the house was inexpensive. Nor does a high advertised yield compensate automatically for weak demand. My article on the profit left from £1,000 rent explains why I look beyond the headline income.
Test the local demand, not just the national story
Population, employment and transport connections can all help you understand an area. But a broad economic story needs to connect with the property you’re considering. Who is likely to rent it, and why would they choose that location?
I’d want to compare similar rental homes, not a mixture of rooms, flats and family houses. Asking rents are a starting point; speaking to local letting agents about achieved rents, demand and realistic letting times can improve the picture.
The same applies to purchase prices. The government’s sold property price search can help you investigate completed transactions in England and Wales. A sold price still needs context, including the property’s condition, size, tenure and transaction date.
My original video mentioned proposed infrastructure as part of the Sheffield story. Plans can change. I wouldn’t make a purchase depend on an old transport promise without checking its current status, funding and relevance to the exact location.
Build a repeatable way of choosing an area
I’d start with a small shortlist of places I can realistically understand and manage. Then I’d compare the type of property I want to buy, the likely tenant, the rent, total buying costs and the work required.
Next I’d establish how the investment will operate. Who handles viewings, repairs and emergencies? What local licensing or planning requirements apply to the intended use? What would make the property difficult to let or sell?
Finally, I’d test a less comfortable outcome: lower rent, a longer void, an unexpected repair or more expensive finance. An area that only works under the most optimistic assumptions isn’t giving me the advantage I want.
This fits with my broader property investment planning approach: make the decision specific enough that you can judge whether it’s working, rather than relying on a vague belief that property always goes up.
Choose the place where you can make a sound decision
I don’t have eyes everywhere. In the video I was quite open about not knowing places such as Liverpool or Doncaster well enough to claim an advantage there. That doesn’t make them bad markets. It means my knowledge had limits.
The right location for you may be different from mine. Start with the evidence and relationships you can build, then choose the property on its merits. Familiarity is useful, but it only becomes an investing advantage when it helps you buy and manage well.
If you’d like help thinking through your location and strategy, book a free 30-minute call. You can also explore the Starter Club or find out about Done For You if you’d like support with your next step.