One of the great advantages of investing in real estate is the sheer variety in the industry. As investors, we can have our pick of strategy. There are methods like BRRR, fix-and-flip, wholesaling, single-family, multi-family, commercial...so many ways to go about investing, not to mention the variety in the types of investment properties.
A debate has long-raged over what kind of real estate investments are the best. There is another debate, however, and the winner has steadily shifted over the years.
This is the question of where to invest. For a long time, real estate investors focused on their own local markets. After all, you know your own market, you can check-in yourself, and have the ability to do some of the work yourself, even if it isn’t an obligation.
It used to be that remote investing was considered too risky. You didn’t know what you were really buying. You worried about being scammed, or not being able to get there in the event of a big problem.
What we’re seeing now is a shift in favor of remote investing. So many of the fears of yesteryear are gone — having been replaced by the technology and innovations necessary to make remote investing not just a possibility, but a real, viable, profitable option for real estate investors.
A recent study from HousingWire demonstrates this “rise of remote investing.”
But why is it such a good option for today’s real estate investor? Amid the COVID-19 pandemic, the importance of work — and investing — from a distance only becomes more evident.
3 Reasons Remote Investing Makes Good Financial Sense
Expand market opportunities.
Perhaps the most obvious advantage in investing out-of-area is the expansion of your market opportunities. When you focus solely on investing in your local market, you limit not only the scope of your investments but the number of properties you can invest in. While some of us may live in and around a plentiful real estate market, this is not the case for everyone. Not only does a local focus limit your options, but it impacts how effectively you can scale a portfolio.
Your local market may or may not be the most affordable. For the real estate investor, a poor debt-to-income ratio can be a portfolio killer! If you struggle to afford the properties in your market, it might not be the best option for you.
By the same token, rental demand can fluctuate from market to market. A lack of rental demand means less rental income and the potential for greater difficulty in filling vacancies.
Sticking to your local market, in short, limits your ability to invest effectively.
Hedge against risk.
Part of risk management is portfolio diversification. For us, there are two primary areas of diversification: property and market. You do diversify your portfolio when you own multiple investment properties. On another layer, you diversify your portfolio when you own multiple properties in multiple markets.
Be sure to check out: Secondary Markets for Long-Term Real Estate Investment Success
Look at what we saw during the Great Recession.
Some over-inflated markets crashed and crashed hard. Others were barely affected, and some grew beyond expectations during recovery.
So much of the benefit in portfolio diversity on a market level is in these such instances. The real estate market is affected by the local economy, which is affected by local, national, and even global economic factors. While we cannot change the national and global factors impacting our investments, we can diversify — and thus insulate ourselves — from local market risks.
This diversification across multiple investment markets helps ensure the strength of your portfolio even in uncertain times.
Turnkey service packages.
We think a turnkey real estate investment strategy not only makes the most sense but is most effective for passive investors looking to build their wealth. With over fifteen years of experience, REI Nation can say that with confidence. We have the track record to prove it!
Remote investing has to take into account your strategy. It works best and most effectively through a turnkey provider such as ourselves. There are so many needed services — from management and maintenance to customer service and portfolio advisors — that an investor does well when they can bundle these services.
It is difficult, if not impossible, to succeed as a remote investor without help.
When remote investors choose REI Nation, they receive access to:
- Thoroughly vetted investment properties in world-class markets
- A personal portfolio advisor
- Regular reports and updates on their properties
- Diligent, detail-oriented property management & maintenance teams
This is key — we bundle these services. They’re in-house. If you are a real estate investor going at it alone, you have to find such services from multiple providers — increasing room for error and miscommunications.
When everything is centralized in a turnkey provider known for its quality of services, you can invest remotely with confidence.
REI Nation is your answer to hassle-free turnkey real estate investment. Call today.