One of the biggest hurdles individual real estate investors face is the debate over where to invest. For many, investing where they feel safe is natural. After all, you know your neighborhood. You can see real, tangible opportunities pop up all around you as the market shifts.
We know, however, that investing in your personal real estate market is not always the wise choice. In fact, better and more viable opportunities can be found beyond your own scope of experience. We can attest to it — the vast majority of our investors are out-of-state! They know that there are major opportunities to be had in markets all across the nation.
But why? Why, especially now, is remote real estate investing the way to go? And how do you do it well? We’re here to break it down.
Key Advantages in Remote Investing
One of the biggest reasons to invest in remote real estate markets is that it provides investors with adaptability and opportunity. While your personal, local market might be great, it has a limited supply of investment opportunities. So on one hand, you are able to reach out into other markets when your local opportunities come up short. Maybe you’re in a tough market that has a lack of stock and demand, or a too-hot market that won’t provide good returns based on competition and list prices.
A willingness to invest out-of-area means that you can adapt to your specific budget, risk tolerance, and portfolio needs. Not only that, but we’re seeing how COVID-19 is re-arranging market desirability. Markets once considered prime for investment are no longer looking so attractive as remote workers and health-conscious populations begin to move out.
If you’re an investor who is unafraid to invest in markets beyond your local borders, you can adapt to the shifting priorities and preferences of your customer — the residents who will rent your properties!
In general, there will just be more to choose from, too!
Portfolio diversification is absolutely key to the success of a real estate investment portfolio. Obviously, you diversify on one level simply by owning multiple investment properties. You take that a step further by investing in multiple investment properties across multiple markets.
Portfolio diversification hedges against risk. On a very basic level, as an example, if one investment property faces a vacancy, you have multiple other properties providing cash flow. This cash flow can supplement a temporary loss and keep your passive income from dipping into the red while a new resident is found.
Be sure to check out: Portfolio Diversification Strategies for Real Estate Investors (And Why They Matter)
How do multiple markets hedge against risk? Isn’t it riskier to have your fingers in too many pies? Not if you’re working with the right people. Obviously, if you’re having to work through multiple different companies in each market, it can get confusing. Quality will vary. But if you have a unified provider (like REI Nation) operating in multiple markets, you see greater consistency in services, quality, and experience.
Working in multiple markets means that should there be an economic issue, natural disaster, or other events that drastically impacts rental demand, you are shielded from the full impact of these problems. As an example, look back on The Great Recession.
Even though the 2008 Housing Crisis impacted just about every real estate market in the country, it impacted different markets on different scales. Some didn’t have as much to lose. Some bounced back more quickly. A varied portfolio means that all of your investments aren’t going to be in a market that is dealt a tough blow! Other investments can sustain you in times of trouble.
How Do I Invest Remotely Effectively?
With a Trusted Turnkey Partner!
We believe there’s only one real way to safely and effectively invest in real estate remotely. You must utilize the services of a trusted turnkey partner!
It’s not impossible to do so by other means. But it’s harder, it exposes you to more risk, and it puts more of a burden on your back as the owner. A trusted turnkey partner like REI Nation has already done the market analysis, has already identified key investment opportunities, and has teams in place to manage them with a level of experience, quality, and consistency that you won’t get anywhere else.
Portfolio diversification is key, but making it happen on your own is near impossible. Partner with the right people — the people who already know the markets and have done this thousands upon thousands of times.
Find our why REI Nation is the premier choice for passive investors.