Diversity is one of the keys to success in real estate investment. For real estate investors, what it means to diversify can vary. It can mean changing your strategy and owning properties across multiple types: single-family and multifamily properties, short and long-term rentals, and more. But most commonly it means investing in different real estate markets. For some, that can be a scary notion.
While real estate can be affected on a national level, for the most part, markets operate and fluctuate on their own local levels. For real estate investors looking to maximize their profits and control their risk, spreading out their investments over a variety of markets is a wise decision. If the economy or real estate market in one city experiences turmoil, they don’t have to worry that their investments as a whole are going to be in jeopardy.
That said, the idea of being involved in so many real estate investment markets across too many geographic locations can be intimidating for some. After all, you can only be in so many places at once. The notion of managing long-distance properties and keeping tabs on it all...yikes!
Being an investor from a distance, however, doesn’t have to be a big deal. In fact, you’ll find that it can be one of the most rewarding strategies out there. Here’s how you can execute it without a hitch.
4 Secrets to Successful Long-Distance Real Estate Investing
Value Market Stamina
Passive real estate investors should be looking to populate their portfolios with properties that are going to provide steady, reliable returns. Ideally, they’re looking for properties that will demand minimal maintenance. While it’s unavoidable in terms of wear and tear and tenant turnover, you can avoid the stress and drama that comes from an unpredictable and volatile rental market.
Choosing the right real estate market for your investments is absolutely key to success. While it may be tempting to pick a market that is experiencing a flurry of activity and growth, you may find the frenzy more stressful than anything. You’ll wind up in bidding wars, struggling to make the numbers work as prices fluctuate and even worrying about an impending market crash.
In more “slow-and-steady” markets, the demand may not be as high, but you can generally expect the returns to be more reliable in the long-term and less stressful to deal with overall.
Invest in Property Management
A real estate investor cannot expect to invest in properties long-distance without the help of a quality property management team, period. They are crucial to your success. They are important to any real estate investor, but they’re a lifeline for a passive investor. From a distance, they ensure that everything runs smoothly, that tenants are content, the property is well-taken care of, and that your investments, as well as your reputation, are protected.
For you, it’s not enough to hire a property manager. You have to hire someone that you trust and build a solid relationship with them. Do you want to put your investment future in the hands of someone you don’t trust? No! It takes a relationship. Ultimately, it’s not so much about managing your properties long-distance, it’s about trusting that your managers can do it for you.
Do Your Due Diligence
Too many real estate investors rush headlong into a buying decision without doing their due diligence. It’s not just about examining a particular property that they are interested in but investigating the market in which it resides. It’s easy to overlook these details when dealing with an unfamiliar market—after all, the nuance is difficult to glean from online searches and statistics. Still, those statistics are valuable, and so is the nuance. As an investor, you need to know where that market has been and where it is heading. What are some potential issues? What do other investors in the area have to say about it?
Don’t just do a cursory glance and hire management and think you can buy a property and be fine. Make some connections and talk to people on the inside. As with any business decision, any insight you can glean can give you a valuable advantage.
Keep Your Hands on the Wheel
Part of finding success in remote real estate investment calls for investors to remain engaged in the investment process. No investor can be truly passive and be successful. For success, there are two things beyond due diligence that you really have to do:
- Cultivate relationships. This can be with your turnkey real estate provider and property management team. The people who are on-the-ground and taking care of every little detail to ensure that your investments run smoothly and provide you with the cash flow you desire. You need a good relationship to get the best results. Communicate. Build a rapport. Share your goals, needs, and vision. You’ll find things falling into place much more quickly and efficiently when you do!
- Set the right goals. When investing long distance, sometimes it’s not about gaining as many properties as you can all at once. It’s more about maximizing what you have. Are you setting the right goals for your investments? Scaling at the right pace? Examine your priorities. Ask your turnkey provider for insight (we’ve been around the block). We can help you determine the right path for you and where you are right now in your real estate investment journey.
Investing in multiple markets doesn't have to be stressful or intimidating. With the help of a turnkey provider, you'll find that it is the most rewarding way to invest in real estate.