No, I’m not talking about for growing corn, but for growing your real estate investments. If you want to be a successful and smarter real estate 
investor, you should find a particular area and farm it for real estate deals. It just makes good real estate investing sense. Just as you would not try to scatter your corn crop all over the country or your particular city, you should not scatter your real estate investments all over the country or even all over your particular city (at least not at first when you are starting out).
Farming means selecting an area and then getting to know that area like the back of your hand. You need know all the streets, the house types, average retail sales price, price trends, rental rates and rental trends. By having all of this information on hand for quick reference, you can act quickly if a deal presents itself. (In hot markets, quickly may mean as little as a couple of hours!)
Farming a particular city or neighborhood provides the real estate investor with many advantages.
- You can easily get to know the area and quickly develop a “mental map” in your head.
- It is much easier to keep up with comparable sales and rents on a farm as opposed to an entire city, region or country.
- A farm allows you to focus by limiting the amount of info (noise) coming at you. This focus can really help you when you are just starting out.
- A farm will provide confidence as you get to know your farm more and more.
- A farm will save you time, money and hassle. This fact alone is worth it!
Where should you farm? I recommend you look for an area that is maintaining property values and where people have and hold jobs. It does not have to be the nicest neighborhood or even the lowliest. Although both of these types and everything in between will have deals in them for you to farm and grow.
I also suggest, at least when you are beginning your real estate investing journey, that you pick an area close to your home or work. This strategy will provide you will several more advantages.
- Your farm will be located in an area you are already going to, so no extra drive time.
- You will most likely already be familiar with the area.
- You can keep things close. I really like this one since I manage my own properties. This one really saves you time when there is an emergency in the middle of the night during an ice storm (ask me how I know this).
How big should your farm be? The answer will depend on many factors, but here are a few guidelines.
- It needs to be big enough so that you can find enough deals to invest in. Farming only in your 30 lot subdivision will not give you much to eat.
- It should not be so large that you are driving 30 minutes or more to get from property to property. All of mine for example are about 10 minutes driving distance from my home.
- The size will depend on your strategy. If you are landlording it can be smaller, if you are wholesaling it will most likely need to be larger in size to find both sellers and buyers.
- Size will also depend on where you are located. If you live in a big city you may be able to focus on one or two neighborhoods. If you live in a small town you may need to focus on the entire town. If you live in a rural area you may need to think larger and focus on the entire county.
Farming is a great real estate investing strategy, especially for the beginning investor. So get your maps out, grab a highlighter and pick your place to farm for your real estate deals.
