If you’re a property investor who loves to travel, here are some tips to make your long-distance properties profitable.
For some people, traveling is an opportunity to scout out new real estate opportunities. Other people use real estate investing to support their desire to travel. Either way, if you’re a property investor who loves to travel, here are some tips to make your long-distance properties profitable.
1. Get your broker’s license
Do you have your real estate license? If not, consider getting licensed because it will open up a whole bunch of opportunities for you. Mostly, it will give you the legal authority to act as a real estate broker, which will save you money each time you buy or sell property. However, you’ll need to get your license in each state where you wish to perform transactions.
For instance, say you travel to Washington state often and want to buy property there. Get your WA real estate license online through RealEstateU and you’ll be able to act as your own buyer’s agent. As a legitimate agent, representing yourself as the buyer in your transactions will save you thousands of dollars in commission with each purchase.
The more money you save, the more profitable your investments will be overall. Paying commissions to agents gets expensive over time and you shouldn’t need to waste all that money if there’s no reason to pay someone else.
2. Get to know the locals
Just like buying property in a familiar neighborhood, it’s wise to get to know the locals in unfamiliar areas where you’re considering buying property. You can always get a general feel for the kind of people who live in the area just by chatting a bit. You can also learn more about the crime rates in the area from the locals. Not every crime is reported, and statistics can be skewed.
While you’re at your destination, start chatting with people at coffee shops, bookstores, and parks. Just tell them you’re new to the area and you were just wondering what they thought about living there. If people don’t like something about the area, they’ll tell you all the juicy details.
3. Research historical property values
Look at historical property values for the homes you’re interested in buying and see how the values tend to grow over time. While there’s no guarantee prices will continue to rise, since sometimes they dip, it will give you a good idea of what you can expect in the future.
Naturally, real estate values depend on the market, especially location. However, seeing historical property values will give you an idea of what might happen in various markets. For instance, if you look back through 2020 and 2008 property values, you’ll see what to expect if there is a recession or another pandemic.
You can’t predict the future of housing markets, but you can take note if a particular area tends to do worse when bad times hit. This information will help you make an informed decision to skip buying property in areas that might not recover well.
4. Connect with a property management company
Property managers are life savers for out-of-state investors. They can handle every landlord duty, including collecting rent, screening tenants, marketing vacancies, and managing eviction lawsuits through the court. Having a property manager can also help prevent you from getting sued.
Owning rental property out of state is a huge burden without a property management company. To take care of your tenants properly and according to the law, you need someone available 24/7 to help your tenants when needed.
For instance, if a tenant experiences an emergency situation, like having no water or heat, you generally only have 24 hours to fix the problem. Having a local property manager will ensure that all emergencies are promptly taken care of and you won’t get in legal trouble.
5. Never buy property without seeing it live
This should go without saying, but it’s wise to never buy property without taking a tour. If you’ve been eyeing a property you haven’t yet seen in person, don’t sign any papers or make any implied agreements via text or email until you travel to the area.
Implied agreements are often treated as contracts in court, so always make it clear that you will need to see a property in person before committing to buy.
Long-distance properties can be profitable
With the right planning and research, your long-distance properties can become quite profitable. The key is to be highly selective and hire out all of your landlord duties, either to an individual or a property management company.
