Putting all your money into one local real estate market is risky. When that market drops, your entire portfolio tanks, you can't access your money, and you're stuck. Spread investments across different regions so some assets keep growing even when others decline.
If you buy everything in your own backyard, then you're just relying on that property market to always be going up in value. But it doesn't work like that. It goes in peaks and it goes in troughs. So if you have everything just in your own backyard, and sure, while the market is doing really, really well, happy days. You're going, this is amazing, fantastic. But then the market hits a peak and it starts coming down the other side again. And guess what? Because all of your equity and all your value is trapped in that one marketplace, then your whole portfolio starts coming down the other side. You can't get access to liquidity, you can't get your equity out, and you don't have a part of your portfolio which is going up. So you want to create a diversified structured portfolio around different areas.
