How to Become a Remote Real Estate Investor

Are you looking to expand your rental property portfolio beyond your current city or state? Or maybe you’re looking to get your feet wet in real estate investing, but your city doesn’t have many high-ROI opportunities? Thankfully, with technology, you can now invest in real estate virtually.

The Benefits of Remote Investing

Traditionally, most people resort to investing in rental properties that are in their same neighborhood, city, or state. There’s something nice about being able to put “boots on the ground” and see the property with your own two eyes whenever you want. 

However, restricting yourself to local investing is doing yourself a huge disservice. Remote investing can be highly lucrative and beneficial. Here’s why:

• Diversification. As your real estate portfolio grows, you should look for different ways to diversify. In addition to investing in different types of properties (i.e. residential, commercial, and industrial), mixing up the locations gives you access to different markets with varying levels of risk exposure.
• More options. Anytime you expand the number of investment options available to you, there’s an increased chance of finding high-ROI investments that allow you to grow faster. Remote investing is particularly attractive for investors in overpriced markets (like Los Angeles, New York City, etc.). Less expensive markets allow for more realistic options.
• Strictly business. When you invest in local real estate, it’s easy to let emotions get in the way. You might have certain associations with the neighborhood or feel a certain way about the type of property. But with a remote investment, it’s purely numbers-based. All decisions are made based on concrete, objective factors. This typically leads to more profitable investing. 

How to Be a Successful Remote Real Estate Investor

As you can see, there are some distinct advantages associated with remote real estate investing. As you build your portfolio, you may want to consider diversifying with some properties that are outside of your specific market. Here’s how you can do that:

• Know what you want. It’s critical that you know what type of investments you’re open to, what your expected ROI is, how much risk tolerance you have, what your time horizon is for exiting an investment, etc. Without honing in on these details, your search for remote investment opportunities can easily become too broad and disjointed. Definitely remain open to shifts in the market, but try to narrow the scope a bit as you search. 
• Build your team. Because you’re unfamiliar with remote markets, you’ll need to build a team of people who understand local dynamics. At the very least, you’ll want to have an experienced real estate agent in the area. 

A good real estate agent helps you get a feel for the local market, which neighborhoods are on the rise, which ones are on the decline, future building developments, etc. If nothing else, it gives you more confidence in your decisions. 

• Have boots on the ground. Once you invest in property remotely, you need someone local to manage the property on your behalf. Look for a company that offers more than just basic rent collection. 

For example, companies like Crown Luxury offer full service property management that includes things like rent collection, lease enforcement, property accounting, repair coordination, and monthly financial reporting. That’s what you want out of a property management company. 

When you have a good property manager on your side, it does a couple of things. For starters, it reduces stress. But, perhaps even more importantly, it insulates you from risk by ensuring you’re following all of the local laws and regulations regarding things like tenant screening, property requirements, and rent regulations.

• Don’t fall asleep at the wheel. When a property is out of sight, it’s often out of mind. This is a good thing when the property is cash flowing and producing a healthy ROI, but can quickly become a risk when circumstances change. Make sure you’re staying alert and carefully reviewing each property’s fundamentals and finances at least once per month. 

Adding it All Up

When it’s all said and done, successful real estate investors understand the importance of diversifying by looking beyond your zip code or neighborhood. There are profitable investment opportunities in all 50 states (and beyond). By waking up to these properties, you can enjoy bigger and better returns.