What Makes A Good Area To Farm?
I want to start to farm an area but I’m not sure what makes a great area? any ideas???
What is the median income in your area? How much can the average buyer spend for a home. You want to target that price range.
Where are the good school districts? Good schools are a serious selling point.
Where are the amenities? The bus lines, the museums, the schools, the college, the hospitals?
Where are the jobs located? Where is the shoopping?
Look for entry level to 2nd home level for middle class buyers close to as many amenities as you can get together in one area.
Remember, you not only have to buy, you have to have buyers, so look for an area where a house would be easy to sell, with a large buyer pool.
tatertot pretty much hit it on the head…but you want to farm the area before everyone knows it has the great school district and before the best roads are finished, as soon as the new business parks are announced, etc…
farm your local governments/chamber of commerce websites first to know when and where your tax dollars are being spent. infrastructure investment ultimately builds property value…
I like areas with older homes. I also look to see if other houses have been or are being rehabbed in the area. Also, (RE Agents don’t get mad), if I see some of the big name RE companies listing houses in the area, I know it’s “hoppin”.
what about listings in the area? Which would be better, more or less?
the really successful investor has farmed the area before it starts hopping and the big firms have started selling in the area.
the key is to know your market!
Kenvest is describing an excellent strategy for buy and hold.
I’ve never heard anyone who does buy and hold use the term “to farm an area”. That’s a term I’ve heard used by birddogs, wholesalers, contract assigners, lease option, buy and flippers; people who have turn-around.
Getting there early is perfect if you are going to wait. If you want to turn around and re-sell immediately, it will be easier in areas that the home owning public already thinks is the best place to own.
What you intend to ultimately do with your purchase will affect where you want to be buying.
You want to get MLS stats, perhaps from an agent or ask neighbors how long homes take to sell. You want to get a neighborhood where selling activity is decent, but homes aren’t taking forever to rent or sell. There are some great areas in Austin that I thought about, but only about 30-40 homes sell a year. I chose some farms of about 500 homes that I like. The market is good there and it’s around the median price range in Austin, maybe lower which is about $200k. Investors here try to buy below $150 on rehabs or rentals.
how long does it take to generate a deal from farming activities?
for me, it can easily take 3 months to close a deal if you have immediate hits. i would say that the more typical time frame to generate a deal is at least 6 months, more like a year and sometimes several years.
agaon, in my area, if its moving quickly, you’ve proabably waited to late because the area is moving quickly because it’s already been farmed…