Learn an area before you buy: 5 steps to master nodal strategy
‘Nodal strategy’ is a fancy word for a very simple thing. In short, it’s the principle of acquiring the worst property in the best neighbourhood, rather than the best property in the worst neighbourhood.
Adopting a nodal strategy as an investor means: do your research. Start at the end. Here are 5 steps to help you:
1. If you’re new to this, it’s probably best to start with an area you like. Somewhere close to home, that you’re familiar with, frequent regularly, or have a good feeling about. That’s the ‘node’.
2. Learn everything you can about the node: its residents, businesses, shops, owners, rentals, supply & demand, tenant & investor turnover, access, prices, town planning, developments... Don't stop until you think you understand what makes this place tick.
3. Have fun. Get creative. Speculate. Try to spot trends before they’re trends. Shit, make the trends.
4. Once you know the node and you like what you see... it’s time to go shopping! Identify assets that fit your strategy and start conversations with their owners. You’ll be surprised how many deals you can do on properties that are definitely ‘NOT FOR SALE’.
Tip: NOT FOR SALE is crap. Everything’s for sale. And if it’s not, you just haven’t found the angle yet. And no, it’s not just about the price. There are plenty of ways to make a deal that have nothing to do with money.
5. Don’t be in a hurry. Property is a long-term game. If you don’t do a deal now, and you do all of this stuff right, you’ve gotten to know your neighbour and you’ll do a deal when the time is right.
Get this method right and you transact ahead of the game. After all, can you think of any deal you’ve ever made in your life that didn’t depend on research?
For assistance with your nodal strategy or professional property services, Contact Kat.