If you’re a real estate investor, you’re always looking for opportunities in an area with appreciating real estate, a high quality of life, a thriving job market, and a strong base of renters. But what if you’re eager to invest, but your market may not have a big enough renter population? Or what if your city has all of the right things going for it, but it’s too expensive to buy into? In either of these scenarios, it may be time to consider buying in a different city or state. I have personally built my portfolio by investing in several states, and I’ve learned from experience how to do it the right way. Here are a few things to keep in mind.
Do your homework.
As with any property, you need to ensure that your investment property will cashflow. That holds true if you’re buying across the street or across the country. Make sure you understand the market where you’re buying. Make sure that there are plenty of potential renters in the area, because it doesn’t help to buy an affordable property if no one will rent it. Also consider the impact of the area’s climate issues. You may be from a part of the country where flooding is rare, but if you’re buying in a hurricane-prone region, make sure that you’re not buying in a flood zone.
Get boots on the ground.
Work with a real estate agent based in the market where you’re looking. They will be able to share some local expertise that you wouldn’t necessarily be able to glean from the internet. While you don’t need to have seen the property in person before you make an offer, you should definitely see the place in person before you close on the property. While it’s rare, you could make some last-minute discoveries about the area or the property itself that could make it a nonstarter.
Establish a team in the area.
You’ll be relying on others to act as your eyes and ears, so make sure that you have a reliable and trustworthy team to handle any emergencies as well as routine maintenance and upkeep. Your real estate agent should be able to help with some referrals. If your finances allow it, I would advise you to hire a manager who lives near your property. Property managers’ rates vary along with what they will and will not do, so make sure you’re clear on what exactly they will handle.
Automate rent payments.
There really isn’t any advantage to having a physical check mailed to you for the rent. It’s a disadvantage to both parties: tenants have to take the extra step of mailing it, and property owners have to cross their fingers that it arrives promptly. People have gotten used to paying for things online, so tenants will appreciate the convenience of making online payments.
So those are the tips that will simplify remote property owning. If you’re serious about buying in a remote location, make sure that you factor in the expense of visiting your property before you close. Buying in a different market can be very lucrative, you just need to do it the right way.