Investing in real estate is one of the most reliable ways to build wealth over time. In the short term, you can generate regular cash flow by charging rent that exceeds your monthly expenses for a given property, often resulting in thousands of dollars of income per year per property. In the long term, you can benefit from property appreciation, sometimes doubling or tripling your initial investment.
But until relatively recently, property investors were somewhat limited in the number of properties they could reasonably evaluate and invest in. These days, property investors and managers have access to a wide range of tech tools that allow them to buy and manage property in other areas – sometimes across the country, or in a totally different country altogether.
Advanced Technology in Real Estate
Let’s take a look at some of the advanced technology that allows real estate investors to purchase properties in more dynamic and interesting locations.
- Discovery. Real estate discovery tools connect investors to millions of listed properties, allowing them to review and evaluate countless options in other areas. You can search for properties in specific cities, even down to specific neighborhoods, and set your price range so you only see properties that are affordable to you. It makes it trivially easy to find and consider properties that are a perfect fit for your portfolio.
- 3D tours and more. Beyond that, once you find a property that is of interest to you, you don’t have to visit it in person to determine whether it’s as good as it looks on the surface. Thanks to advanced technology like 3D tours and aerial drone footage, you can get a detailed firsthand look at the property without ever setting foot on it. This way, you can make sure you’re getting your money’s worth before you offer a down payment.
- Active communication. By now, we’re quite familiar with advanced communication technology, allowing us to instantaneously email or chat with people across the country. You can quickly and easily get ahold of a representative from your property management firm to resolve any issues that come up.
- Property managers. Speaking of which, property management firms have become more popular and provided more tech tools to their clients for convenience. With a simple Google search, you can generate a list of many property management firms in your target area and determine whether they’re a good fit for your investment strategy with the help of online reviews. From there, you can quickly start a new relationship with a real estate investing partner and start hunting for property in that area – all without leaving your home.
- Listings. According to Los Angeles Property Management Group, writing effective listings is one of the most important elements of your real estate marketing strategy. And thanks to modern technology, it’s easier than ever. Thanks to the abundance of realistic listing platforms available and the accessibility of real estate listing templates, you can quickly generate a listing destined to fill your property as soon as possible.
- Tenant and landlord portals. Interactive portals also make it easier for both tenants and landlords to manage the property. Tenants can submit rental payments, review their payment history, file maintenance requests, and reach out for assistance when they need it. Landlords can review all of this information as well and stay connected to their income-generating property.
Why Invest Elsewhere?
Why would you bother investing somewhere else, when you could simply invest in your own city?
There are many possible motivations.
- Lower property prices. Different areas have drastically different costs of living and drastically different property prices. If you’ve been priced out of your current area, or if you feel like your city currently has over inflated property values, you can search for a city where the property prices are much more reasonable. This can decrease your risk and increase your chances of consistent profitability.
- Less competition. Similarly, you may find that certain areas have much less competition. Major cities tend to attract investors from all over the world, while rural towns and less popular areas end up neglected. Less competition means lower purchase prices, fewer bidding wars, and easier property acquisition.
- Up and coming areas. Broadening your potential investment areas also gives you access to more areas that are up and coming. You can start buying properties in areas that haven’t yet fully developed, capitalizing on their forthcoming growth.
- Future plans. Some investors choose to invest in property in a specific city because they have plans to move to that city at some point in the future. For example, if you plan on retiring in Florida, you could purchase a property there now and plan to move into it many years, or even decades, down the road
Tips for Managing Property Elsewhere
If you do choose to manage property in a different area, tech tools will help you do it efficiently. But it’s still important to have a good strategy in place from the beginning.
- Choose the right partners. You’re going to need partners if you’re investing outside of your own city, whether you work with a full property management firm or just a real estate agent. The quality of your choice here will have a significant impact on your long-term potential, so make sure you review your options carefully.
- Start small. Managing property long distance is risky, so don’t spend too much at the beginning. Start small, with one or two reasonably priced properties, and only scale once you feel comfortable doing so.
- Do your due diligence. It’s always important to do your due diligence when making a major real estate investment, but it’s even more important when you’re investing in a foreign area. Get an understanding of all the local neighborhoods and the dynamics of the area before making any purchases.
- Stay up to date. When new things happen in your current city, you’ll likely hear about them sooner or later. For example, when crime rates spike or when new employers move into town, you’ll hear about it – and you’ll be able to take action relevant to your property management strategy. When investing in outside areas, you won’t have that luxury – so make sure you keep reading the news to stay up to date.
Investing in property outside of your current residence isn’t the right strategy for every property investor. But it’s more possible now than it’s ever been in the past, and for some investors, it’s incredibly lucrative. Make sure you do your proper research before making any significant investment decisions.