Making Money with Long Distance Real Estate Investing

Should you consider long distance real estate investing?

If you’re a newbie in the real estate business, many successful property investors will advise you to invest where you live. This is actually a good piece of advice because it’s difficult to gain thorough knowledge of a real estate market if you aren’t living there. For an experienced real estate investor thinking of growing his/her portfolio, however, long distance real estate investing is a good option. If you have any doubts that this strategy works, just consider the fact that many multi-millionaires made their wealth through owning residential and commercial investment properties nationwide (and even worldwide!). How can you start making money with long distance real estate investing too?

1) Research the Real Estate Market

Location is always an important factor that influences your investment decisions. There are certain elements that make an area attractive for owning an investment property such as a strong economy, job availability, and population growth. These indicate profitable investment opportunities. Thus, if you’re considering long distance real estate investing, you have to do your research to find the right location that offers these elements.

In addition, property investors need to keep up with the market trends like laws and regulations, property prices, interest rates, taxes, etc. Study what your target tenants are looking for to determine what the best rental property in that area looks like and in which neighborhoods people are moving to. Overall, do your due diligence to find the best location for long distance real estate investing.

Related: The Best Places to Buy Rental Property: Look for These Indicators

2) Pay Attention to the Numbers

Being a member of the real estate club means you need to do some calculations before making an investment decision. While you’re researching the real estate market where you want to invest, analyze the potential rate of return of rental properties in that market in terms of cash on cash return, cap rate, occupancy rate, and positive cash flow. Don’t do the numbers only on the rental property you’re considering; you should also understand how these numbers fit into the housing market. In other words, perform a real estate market analysis.

This is important because you want to make sure that long distance real estate investing is, in fact, worthy and more lucrative than your local housing market. Moreover, if you’re wondering how to rent out your investment property (traditionally for the long term or on Airbnb for the short term), these numbers will help you see which rental strategy yields a better return on investment.

Related: Airbnb Investment or Traditional Investment: How to Determine the Optimal Strategy

3) Use Real Estate Investment Tools

Today’s technology is the main contributor to making long distance real estate investing a possible option. Today, property investors can easily access online tools that help them obtain all the information they need regarding real estate – like the investment property calculator. This tool gives you projections of what cash on cash return, cap rate, occupancy rate, and rental income (among others) you can expect.  Thus, a real estate investor can analyze and compare different locations in the comfort of his/her home!

Additionally, there are other real estate investment tools that allow you to search for and find properties online as well. Take Mashvisor’s property finder as an example. If you have a free Mashvisor account, you can simply select any city in the United States and you’ll be given a list of the best rental properties available in that market. You can also play around with different filters to control your search results and find the perfect match in no time.

Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!

4) Consider Finding a Real Estate Partner

Even with the help of online tools, long distance real estate investing is still challenging. Maybe you’re interested in buying an investment property in a city or a country that you can’t access for one reason or another. In this case, having a partner is simply the most convenient solution. In addition, real estate partnerships are generally great because they bring together resources including capital, experience, knowledge, and networking. Not to mention, they can help decrease the overall risk of investing in real estate. Thus, having a partner can make your life as a real estate investor much easier.

For more on this, read our guide: How to Use a Real Estate Investment Partnership for Long Distance Real Estate Investing

5) Hire a Professional Property Management Company 

Of course, with long distance real estate investing comes the question of how to manage rental properties that are miles away. If you’re not interested in finding a partner in the city you wish to invest in, then your other option is to let a property management company run the business. These companies will do all the work including screening tenants, checking on the investment property from time to time, conducting necessary repairs, etc. Keep in mind, however, a professional property management company comes with a price. Thus, property investors need to find the right one that they can trust with their rental properties.

Final Thoughts on Long Distance Real Estate Investing

Don’t give up on your dream of becoming a real estate investor if you can’t find profitable investment properties in your local housing market – long distance real estate investing is always an option! Thanks to today’s technology, thousands of property investors buy rental properties from a distance every day; many are from other states and some are even foreigners investing in the US. There is no reason you can’t do the same thing.

With our real estate investment tools, you can look for and analyze investment properties in your city and neighborhood of choice across the United States. Sign up with Mashvisor or click here to start your property search!

To start your 14-day free trial and subscribe to our services with a 20% discount after, click here.