Long distance real estate investing is becoming more and more popular. As advanced real estate tools become more sophisticated, buying an out of state rental property is becoming easier than ever before. Here’s a rundown of the only tools you’ll ever need to make a successful investment far from home.
But first, a quick look at the pros and cons of out of state real estate investing:
Why Should You Invest Long Distance?
Long distance real estate investing offers investors many unique and rewarding benefits. Foremost, you will no longer be constrained to your own housing market and instead, open yourself up to hundreds of thousands more properties. Markets can vary drastically in their offerings for real estate investors. Some markets may offer only modest ROIs, while others can provide investors with huge returns. Appreciation rates may be stagnant in one city, but skyrocketing in a city only a few states over. By choosing long distance real estate investing, you’ll be opening yourself up to the best real estate markets in the United States.
To invest long distance, it is almost always necessary to enlist professional property management. This means that your investment can become a source of passive income and a great source of cash flow.
Why Shouldn’t You Invest Long Distance?
The main hurdle that stops many investors in their tracks is a lack of local housing market knowledge. Real estate investors often need years just to accumulate enough information about their own market, allowing them to make the best decisions. Thus when it comes to a distant market, all of those years of experience and knowledge become nearly irrelevant. Without the right information, it’s easy for real estate investments to fail. Read on to find out how to solve this issue.
Many investors also opt to manage their rental properties themselves, avoiding the added cost of property management. If you’d prefer to manage your own properties, long distance real estate investing becomes much more burdensome and practically unfeasible.
Related: Long Distance Real Estate Investing: Pros & Cons
What Tools Do You Need to Make It Work?
Heatmap Analysis Tool
Long distance real estate investing is often thought to carry higher-than-average risk. Many investors would shy away from the challenge, believing that the lack of local knowledge and limited access are insurmountable hurdles — and this can sometimes be true. Many real estate investors have tried and failed to invest long distance, often because of a lack of information.
But this is now a thing of the past. Advanced tools have emerged to help investors make the best decisions when it comes to buying a rental property out of state. While local knowledge was once a mandate for a smart investment, the right tools have emerged to take its place.
The heatmap analysis tool offered by Mashvisor helps to mitigate all of the problems typically associated with long distance real estate investing. You start off by selecting the city you’re interested in. The real estate heatmap analysis tool then provides a color-coded map with all of the information you’ll ever need.
You can select your priorities — for example, Airbnb occupancy rate, if you’re looking for an out of state Airbnb investment — and the map will automatically show you which areas have the best occupancy rates. This can be altered for a whole host of important indicators, such as rental income and cash on cash return.
This tool bridges a huge gap for many investors. Location can make or break a real estate investment, and the lack of experience in a particular market can have a huge impact on any investment — both positive and negative.
Related: Finding Income Properties in 2020 with a Heatmap
The property finder tool offered by Mashvisor offers a whole host of powerful features for anyone getting into long distance real estate investing.
This rental property finder provides you with a huge number of listings with just a quick search. But unlike other listing websites, this one provides advanced analytics that shows the investment potential of any property in the search. This is groundbreaking because it can very quickly pull up high return properties that make for good investments for you.
For out of state real estate investing, this tool also allows investors to simultaneously search multiple cities at once. If you aren’t sure where to invest in real estate, this tool can answer your query. You can search multiple cities at once, and get a full breakdown of the best investment opportunities in all of them. Buying a rental property out of state becomes a lot easier when using the right real estate investment tools.
Investment Property Calculator
Knowing the right numbers is a crucial step towards a profitable investment. Taking the time to fully research your real estate comps and anticipating your own profitability can be incredibly time-consuming. In the worst-case scenario, listings can be bought up in the time it takes to do the right research.
Hence using an investment property calculator is a fantastic move for real estate investors. This tool can shave off weeks of research and turn it into a seamless process. You can find out crucial figures like cash on cash return and capitalization rate more easily than ever before. A comprehensive investment property analysis is just a few clicks away!
It’s also crucial that investors study up on their cash flow. But this is most true when it comes to long distance real estate investing, due to some added costs. Mashvisor offers a highly nuanced cash flow calculator that takes much of the guesswork out of your calculation. You’ll need to figure out the terms of your loan agreement. You’ll be given estimates for your ongoing costs and one-time startup costs, but you can adjust these as needed. Then, you’ll get a figure that represents your cash flow, which takes into account any expenses and your mortgage commitments.
This is crucial when long distance real estate investing since property management costs can sometimes have a negative impact on your return on investment. If the cash flow calculator still provides a high figure, then you’re set!
Related: The Best Investment Property Return Calculator for 2020
Successful long distance real estate investing is easier than ever before. By using the right real estate investment app, you open yourself up to the best properties across the United States. Why settle for an “okay” return on investment when you can find a better one a bit further from home?
Start out your 7-day free trial with Mashvisor now.