Chances are good that any time you get a group of people together you will find at least one person in the group who says it is his or her dream to own a nice country property. One with a lot of land, rolling hills, a nice stream running through it and the standard farmhouse with the swing on the porch and the red barn in the back.
In fact, if you took a survey, you would find that probably 10% or more of the population has had this dream at one time or another in their life.
So on the surface, investing in a country home looks like an exciting market. Lots of interest all tied into dream fulfillment. In the marketing world, this is considered a slam dunk.
Where someone lives has a dramatic impact on lifestyle and opportunities. And that keeps it a dream for most people.
Life at a country property is a bit isolated. It is a long drive to anywhere - to work; to friends; to shopping; to new opportunities that are offered in a suburban or urban environment. This challenge means that the dream stays a dream for most people as in the back of their head, they just know living there would not work. In other words, this housing dream is much different than the dream of say a certain type of boat or new car. The former impacts all aspects of life while the latter only impacts the wallet and a small time segment of their life.
So the reality is that there are many, many fewer people actually willing to buy a country property than are interested in the idea of owning a country property.
And that makes it bad for investors. You may be able to buy a country property for very little cash but it may take a very long time to sell - and that means huge holding costs, a long term tie up of capital that could be better used elsewhere and the prospect of a property sitting empty and deteriorating while you seek a buyer.
When you invest, it is always best to seek the slam dunk deals. Real estate offers a variety of these - REO, foreclosure, short sales, rehab projects, abandoned properties and of course nice properties. The key is to be sure they are in a desirable area.
If your city has areas where houses sell quickly and areas where they sell slowly, where are you going to invest?
Probably where resale can happen quickly unless you have a strong business case for purchasing a property in an area where resales are slow. An example of a good business case might be a neighborhood that is turning around and you intend to hold the property as a long term rental unit while the neighborhood improves so you can cash in on the appreciation that revitalization of the neighborhood is bringing about.
And country properties - what business case can you make for an investment there? Can you make it a vacation home for yourself or package it as a vacation home for a well to do city dweller who needs a place to decompress a few times a year? Can you find a family who wants to get away from the hectic pace of city life? Or… well you get the idea.
If your interest is in stacking the deck in your favor, always analyze your real estate investments with a solid exit plan in place. How will you generate cash in your property both for the short term and for the long term? Does the business case make sense? If you cannot build a sensible business case for the deal, it is best to walk away no matter what the acquisition cost is for the investment property.
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