Considering buying an investment property that is long-distance from where you live? I wanted to give you a few thing to consider about this.
Being a long-distance landlord can be intimidating to say the least. So it is a good idea to think about the pros and cons of it before investing.
Let’s start with the PRO’s first.
- You are able to purchase great deals in more affordable markets. This is a great option if you want to start with a property, realize positive cash flow from rent and build equity.
- You can buy real estate in an area you might want to live someday. The houses you purchase can be rented now and held in case you or another investor wants to live there someday.
- Tax benefits. The ability to write off interest paid on a mortgage and depreciation makes buying investment property highly attractive.
Now let’s look at the CON’s.
- You are probably less familiar with the market so you may have to investigate local taxes, going rent rates, and you might know know caliber of tenants you might be able to get.
- Being that you are not there, you might not have a strong list of esrvice providers local to where your property is.
- Day by day management of property activities will be out of your control.
So what are some win/win solutions to buying real estate in a different market than you life. Most professional real estate investors know that the most reliable way to manage property from a distance is to hire a property management company. This is an additional monthly expense that prospective buyers should keep in mind as they run their numbers.
If you decide to proceed with the purchase of a home in another market, here are some things to consider:
- Make sure you spend some time learning your the marketplace you are buying in.
- The inspection will help you understand the condition of the property but make sure you look for referred service providers to help you keep it up to tip-top shape.
- Get the right tenants. Sometimes it’s worth taking less in rent from amazing tenants if you are managing the property from a distance.
- Automate rent and lease payments. There are all kinds of software to collect info and monies remotely.
- Find someone locally to do some of the everyday maintenance things like mowing the lawn, trimming the hedges, replacing HVAC filters, removing snow, etc. but we’d recommend #6.
- Hire a property manager. This will take the pressure off of your already busy day-to-day responsibilities and give you peace of mind.
- When you can, visit your long distance rentals in person, after all, it is your investment ultimately.
If you are considering hiring a property management company, please consider Picket Fence Properties.
Teresa Jennison is the Owner of Picket Fence Properties. Picket Fence Properties is Northern Colorado’s best property management company based in the middle or Northern Colorado in Windsor serving the Greeley, Evans, Windsor, Loveland, Fort Collins, Wellington, Eaton, Firestone and Frederick with all their Property Management needs. Specializing in working with investment properties, for sale by owner homes, houses for rent and existing home rentals.