Education and news for smart DIY landlords!
Today’s topic is on long-distance real estate investing. What is it about? It’s the practice of buying, managing, renting out, or selling a property that’s in another city or state.
While a lot of people may say that it’s best to invest within the market they live in, long-distance real estate investing has advantages. It can maximize your returns through diversification. There’s also more opportunity to find affordable real estate.
But before you invest, you should know that it’s not the same as traditional (local) real estate investing. You’ll want to make sure that you get certain things right. That’s what I’m going to show you below.
There are 3 types of real estate markets. One is a growth market where the population is increasing and the local economy is strong. The other type of market is a stable market where things aren’t fluctuating. The third is a declining market where population is low and real estate sales are sluggish.
Before you invest, take time to evaluate the profitability of an area. You definitely don’t want to invest in cities with declining populations. One indicator of growth is the presence of more young people.
The last thing you’d want is to end up in a bad neighborhood just because you trusted someone else’s opinion. Check the location yourself. Buy a plane ticket so you can stay in the area for a while and get to know it better. Be a neighborhood expert.
When you’re done identifying the right market, the next thing to do is start a team. Your team should include a real estate agent, property manager, lender, and contractor. The most important person on your team would be the real estate agent.
Choose a real estate agent who understands real estate investing well, is hyperlocal, passionate about their job, and has your best interests in mind. You can check out this article on Forbes on identifying the best real estate agent.
Long-distance real estate used to carry a lot of risks, which is why people avoided it. Things have changed, thanks to the internet. Yelp, Zillow, Trulia, and other real estate websites provide us almost every piece of information we need — from listings (with complete details) to real estate news and trends.
There are plenty of tools out there that will assist you in your real estate investing business. You’ll need a tool to track and organize your leads, manage showing schedules, generate professional-looking market analyses, and more. Check out these real estate software options.
Long-distance real estate investing may or may not be the best move for you, but it’s certainly worth a try. Before you dive in, have a strategy in place. Use the tips above to do business from a distance successfully. Good luck!