We’ve hammered it home in article after article on the Smartland blog: real estate investing involves having an in-depth knowledge of the area in which you’re thinking of buying. Once you’ve settled on a property, being a landlord isn’t a set-it-and-forget-it prospect; even after you’ve found tenants, there are always issues to be managed.
How, then, do people handle remote real estate investing? Although it may sound daunting to find valuable properties in other states or multiple cities and manage them from afar, it doesn’t have to be. Here are some tips to help you make remote real estate investing a reality for your turnkey investment portfolio.
It bears repeating because it’s one of the most important tips in any sort of real estate investing: know what you’re buying into. This means conducting a market analysis and in-depth research that will bring you up to speed on every imaginable data point about an area. What are the comps for the property you’re considering? What does the neighborhood have to offer in terms of shopping, schools, public transit, parks, and other factors to attract renters? What does the crime rate and local economy look like? What would a reasonable monthly rental rate be — and is that enough to cover your expenses?
Sure; the photos online look great, but when were they taken? And does that grass look strangely Photoshopped?
Although it will take extra money and a bit of your time to travel to take a look before putting an offer on a rental property, it’s well-worth the investment. The only way you can be certain that you know what you’re buying is to see it in person. This will help prevent any unexpected surprises after you close on the place (i.e.; the photo was taken in 1995 and the “grassy backyard” is actually a desolate lot filled with trash and surrounded by a rusty chain-link fence). Being in the area in person will also give you the opportunity to take a look at comparable properties to assist in constructing an offer.
One of the best remote real estate investing strategies is to work with a turnkey investment property. They’re experts at finding rental properties that will generate a good ROI. They can also work with you to target the geographic area, type of property, and rental rate you’re interested in. An experienced turnkey investment firm can help steer you towards areas and properties with thriving rental markets and away from ones that could be problematic.
Since you’ll be managing the property remotely, it’s also a good idea to work with a property management company. If your turnkey investment firm also specializes in property management, this is an added plus. For one, you’ll be able to continue the relationship you’ve established with them throughout the buying process. Most importantly, a real estate investment company that also manages properties is one that’s committed to its clients for the long haul and not just looking to sell properties and move on.
With a property management company on board, you’ll have a trusted local resource to take care of all of the day-to-day aspects of running the rental, from finding tenants and collecting lease payments to making sure the landscaping is kept up and maintenance items and repairs are being addressed.
Remote real estate investing doesn’t have to be a full-time job. From doing the research to choose a property to managing it, rental property investment and management experts have you covered.