How to purchase long-distance real estate
February 25 2019
Long-distance real estate investing is more accessible than ever in our modern, connected world. But does that mean the opportunity is worth pursuing?
It depends. There are unique challenges and benefits to investing from a distance. The key is to conduct proper research.
Here are several things to consider before you purchase a nonlocal investment property:
Get to know the area. Finding the right nonlocal property requires careful research and in-person visits to the prospective neighborhood. Whether you plan to use it as a vacation home or rent it out, you must consider the traffic patterns, population growth and economic development of the region before you buy.
These factors can help you predict the speed at which the property’s value may appreciate, as well as inform you about any drawbacks specific to that community.
Research additional costs. Taxes differ from state to state and even city to city, and many communities have HOA fees to take into account. Buying in a new place introduces an entirely different cost-benefit ratio than you experienced buying your first home. Consult your financial adviser to know if that difference is worthwhile.
Find local property management. No technology has yet to replace the value of a good property manager. As a local presence, they are a resource to renters and can ensure the property remains in good shape.
Hiring a property manager also means you gain access to their local network of trusted electricians, plumbers and other service providers. Just remember that property managers also add to your expenses.
Think long term. Recouping costs from a second home investment tends to require years of appreciation. When you buy any property -- local or across the country -- you should always think long term so that you get the best value.
Looking for your next real estate investment? Get in touch today.
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