Investing in a long-distance rental may sound like a daunting prospect to some, but thanks to modern technology and improved communications, it’s now easier than ever to buy and manage property in another city, state, or even country. Now, we’re not saying remote investing is easy, because it’s not – but neither is investing in your own backyard. As with any type of real estate investment, there are inherent challenges you’ll face, but more and more investors are recognizing the huge potential of properties in housing markets outside their own. Here’s what you should keep in mind when purchasing and managing remote rental property.
Research the market you’ve got your sights set on
If it seems like we get a little preachy about the importance of doing research before making an investment, it’s because this is literally one of the most important actions you can take before buying property. This becomes even more true when you’re eyeballing a market that you’re not familiar with. Take a look at the area’s housing history and current rental environment, and talk to some local investors to see how their properties are performing. Look up all the stats you can about the area, and don’t forget to take into account forecasts for the future.
Work with a local turnkey group
Turnkey groups are the go-to people to talk to when you’re considering a remote real estate investment. These companies are your local experts for rental properties, and they can provide key insights that you wouldn’t be able to uncover on your own. These groups are like your man on the inside, and they’ve got their ears to the ground to learn all the things that only people who are actually, physically there can know. Things like what’s immediately surrounding the property, who the neighbors are and how well they maintain their homes, what goes on on a Friday night – all the stuff that you would pick up by living nearby, a good turnkey company will know.
Make sure you have excellent property management
Exemplary property management is absolutely critical for an out-of-area rental. Since you’re not present to inspect and maintain the property yourself, you need a reliable and experienced team to do it for you. This company will also handle many of the other details of running the property, including finding and securing tenants, collecting rent, and dealing with maintenance issues. Look for a group that has a history of working with remote investors, and ask them to supply a couple of references. You can follow up with these other investors to get a clearer idea of the level of service, and (if they’re willing) even more insight into what it means to be a long-distance investor.
Visit the property in person or have a designated representative do it for you
Would you buy a property sight unseen? Most investors won’t, and for good reason. It’s important that you make the effort to visit your investment in person before you buy it, so you can see for yourself exactly what you’re getting into. Pictures on the internet or the word of an agent don’t always show a true portrayal of a property, and only seeing the place with your own eyes will give you the accurate picture you need. If you’re not able to do this, you should send a trusted representative in your place.
Out-of-state ownership doesn’t have to be super-stressful and complicated. With some solid research and a great team in place, you can venture outside your own market and invest in a better performing one to give you the cash flow and long-term profits you want.