By Mike Baird
For most people just getting into the real estate investing business, I recommend sticking close to home. It’s a lot easier to oversee rehabs on a flip house if you only have to drive twenty minutes instead of flying for four hours, and it’s a lot easier to find leads on profitable properties when you’re familiar with the area. That said, remote real estate investing can be really lucrative if you do it right. So, if you’re thinking about an out-of-town fix-and-flip or fix-and-hold property, here are a few tips to make the whole deal go a lot more smoothly.
Take a Trip to Get to Know the Area
A lot people who invest in out-of-town flips or rental properties do it because their local market isn’t doing so well and they’re having trouble finding the best flip houses or other real estate investments close to home. Others do it because they’ve found a solid market where they have access to resources and people so that they can make quality deals both at home and remotely.
Whichever is the case for you, I recommend getting to know your remote market as well as possible. Online research is a good start, but nothing beats getting your feet on the ground and learning about the area firsthand. If you can take a few days to visit and explore the city or town where you’re going to be investing, you’ll have a much better idea which neighborhoods are growing and where you should be looking for properties.
As a side note, I usually don’t recommend doing one-off remote investments. When you consider your budget for the whole deal, including rehabs and marketing, you’ll also have to take your travel costs into account. Flying to a different city or state to check out a single rental or flip property is usually not worth it. However, flying out to get to know a new market where you plan on doing a lot of business can be considered an investment in your real estate business.
Meet with Local Contractors
While you’re getting to know the area, get to know the people who will be working with you, too. Go through the same basic steps you’d take to hire a contractor for a local deal. Choose someone you like who has a good track record and let them know that you plan on doing multiple projects and that you’d like to stick with a single contractor. That will let them know that you’re serious and that you’re likely to give them a lot of business. They’ll want to impress you and keep you coming back, so they’ll be very likely to do a good job.
Hire a Local Real Estate Agent
Of course, you won’t be able to be there in person throughout the entire project. In fact, you may not be able to be there when you close on the property or when you sell it. Having a trustworthy real estate agent who knows the market and has experience working with out-of-town investors is key to a smooth deal.
Have Regularly Scheduled Check-Ins
Finally, schedule check-ins with your real estate agent, your contractor, and anyone else working for you in your remote market. Be aware that time zone differences might mean some early morning or late evening phone calls, and keep your phone on and at hand whenever your on-site crew needs to get in touch with you.
Follow these tips and you’ll have a much easier time with any remote real estate investment.