Education and news for smart DIY landlords!
Having a long-distance real estate business is one of the best dreams of investors in the industry. Imagine being able to earn money at home or from a beach at a faraway place. Sounds too good to be true? No, it isn’t.
A lot of investors have already done it successfully. You can do the same as well! But first, let's find out which costly mistakes you should avoid.
Not every investment type is legal or profitable in a chosen area. You might be an Airbnb type of investor buying a property where Airbnb’s are prohibited. Just because your chosen type of investment is legal in an area, doesn't mean it's profitable.
Familiarize yourself with the real estate laws and regulations of the location as well as the profitability of your investment type.
It’s good to see a property in person before you decide to buy it for an investment. But let’s face it - with the pandemic still not over, it would be hard to attend open houses or view properties. And if you wait until everything goes back to normal, you might lose plenty of opportunities.
There are other ways to take a good look at a property. You can request a virtual tour or hire a house inspector to do the inspection for you. All you have to do is be a little more open-minded. The best part of not inspecting a house yourself? You can save a lot of travel or gas costs.
The disadvantage of leaving someone else you don’t know to do your out-of-state real estate investment tasks is that you could be screwed over by them. I don’t intend to make you feel paranoid but it’s just the truth.
However, you don’t need to worry too much because you can ask for recommendations from professionals you work with within your locality. For example, if you need a real estate agent or property manager to represent you in a far area, ask the agent or manager you work with now if they know anyone who’s highly dependable and trustworthy available to be hired by you.
House and service prices differ from one area to another. If the properties in your local area are expensive, similar houses in another city or state might cost less. That’s why you need to study the local housing market of the areas you’re eyeing.
It’s because if you don’t, you might end up sending an offer for a property that’s higher than its actual value. The same goes when you’re hiring a representative. As I said, always be familiar with the real estate system of an unfamiliar place.
As a real estate investor, we understand that once we put up a property for listing, we want that house to be sold ASAP. So we pick the best offer first and immediately ask the buyer how they’re going to pay for our home.
As a house buyer, this is the time when a loan pre-approval letter or proof of funds will be needed. If you don’t have one of the documents ready, the house seller will think you’re wasting their time and find another buyer. Before you do your house searching, always have these documents ready.
It’s normal to treat other investors in a local or different area as competition. However, you can also use their connections to your advantage. Even if the competitors reduce the opportunities for you to profit, they are still happy to help you in finding the best and trustworthy contractors, agents, and property managers.
Now, why is this? The more competition there is in a local housing market, the higher the value of properties due to the increasing demand. That is one of the ways an investor can gain profit. If you hear about a club or a gathering of real estate investors from an area you’re interested in, join them and make friends. Trade secrets and offer partnerships if you have to.
Long-distance real estate investment is hard at the beginning. You must adopt an open mind so you can quickly learn the tips and tricks of good management. To start, find ways to view and inspect properties from the comfort of your home. Then, progress to hiring people who would do your work in the areas you’re interested in investing in.
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