Here's How to Buy Rental Properties Remotely
BUY REMOTE RENTAL HOUSES FOR BETTER INVESTMENT RETURNS
Anyone considering investing in real estate would logically search for local properties first. That is the ideal scenario, but many would-be investors living in expensive cities are being priced out from their local markets. This has led to a recent rise in investors choosing to buy rental properties remotely.
Your next thought might be how can you find a market, pick the right property, and deal with managing it? Thanks to Roofstock, an online marketplace for buying and selling investment properties in midsize, emerging markets across the country, investors can buy rental homes and have them managed by a professional property manager via their laptop.
Why Buy Real Estate Remotely
We've all heard the saying that real estate is all about location. While that's true, it's become less important for the owner to live in the same location as their properties. In fact, many up and coming markets across the country provide more consistent monthly returns and a lower cost of entry.
For instance, let's say you live in New York or San Francisco, which top the list of the most expensive cities in the U.S. in 2019. The median home price in New York's five boroughs is around $652,700, way above the national average of $245,000. In San Francisco, the median home price inside the city is almost $1.4 million, leaving the market out of reach of middle-income investors.
While you may be locked out of the real estate investment market in your expensive city, you can still look elsewhere to purchase a property that will generate income for you.
To a new property investor, investing long-distance can be scary and therefore deemed impossible. But it should be noted that many successful real estate investors make it a practice to invest in properties outside their locality, and it is often this strategy that can bring them a stronger return.
If you're looking for affordable property investment outside your area, the best option would be to go for affordable rental home properties that are priced as low as less than $100,000.
So how can you go about that?
How to Buy Rental Properties Elsewhere
Buying rental properties elsewhere is no easy task if you're doing it on your own. There are challenges you have to face, including title search, home inspections, marketing, tenant placement, and property management.
But today, there are options available for you to conveniently acquire and rent out properties out of state or outside your city. As long as you arm yourself with ample information and surround yourself with experts in the industry, you will be on your way to successful real estate investment.
Easy Way to Explore Remote Housing Markets
Buying elsewhere is not easy with the conventional way of acquiring real estate, but companies such as Roofstock is making it convenient for investors to acquire property investments from a distance.
Through its online marketplace, the company makes this convenient for potential investors to find and buy single-family rental properties while in the comfort of their home using their laptop computer.
The steps are simple: You log in to the system, search for the property you have in mind, review the details of the property, check out, and close.
Throughout the closing process, a team of experts will guide you until the property is officially yours. You start earning the moment you close.
This online real estate marketplace lets you choose properties based on your investment goal. It can give you a selection of properties based on criteria such as higher yield, turnkey, higher appreciation, best schools, and more.
Easing the Challenges of Buying Distant Properties
In the traditional way of buying a house with good rental potential, the buyer will often have to do much of the legwork to decide which property to acquire.
After buying, the buyer then has to face the challenges of managing the property. This is where the role of a reliable property manager comes into play.
What makes the Roofstock system advantageous to long-distance property investors are the tools made available on the platform.
You can view pictures, 3D images, and virtual tours of the properties you are browsing. Information such as property inspection and valuation, title report, insurance quote are also provided under the listing. The investor will also see a visualization of the return and cost estimates.
If there is an existing tenant, information about the current lease, payment history, and tenant details are also provided. Neighborhood rating and local school scores are also on the platform to help every investor assess the investment property.
Work With a Trusted Property Manager
As any expert rental property investor would emphasize, your property manager is your best ally if you want to make money in your rental property. It's a common mistake of many beginner rental home investors to diminish the importance of the property manager.
If you want that passive income from your house for rent, then you need a good property manager.
Just think of these tasks you have to do when you run a rental property:
- Market the property to potential tenants.
- Select a tenant, one that will not potentially damage your property.
- Prepare a lease agreement and other lease-related documents, making sure that you and your property are protected in writing.
- Repairs and maintenance, which can include emergency repairs late at night or at 2 o'clock in the morning. You will need a handyman contact in this regard.
- Communicate with the tenant when needed.
- Schedule inspection of the remote rental home because you just never know what some tenants are up to.
- Evict a tenant if necessary.
The property manager is key to your position of accumulating property and wealth. You can venture into handling property management yourself, but chances are that you will learn your lesson and look for a property manager in the end.
Once you know how property managers work, you will know that the money you pay them for tasks such as tenant placement is all worth it. It's because, in exchange for paying the property manager, you get to relax and have the peace of mind that your distant rental home is doing well and generating passive income for you.
With a good property manager, you can then focus your energy on looking for more property investments. This clears the path for you to venture into investing in multiple rental properties.
With Roofstock, this is made even more convenient as the company can connect you with property managers who are vetted to provide high-quality services.
Property managers at the online real estate marketplace are also likely to charge 8 percent or lower of the gross collected rent. Some property managers also charge a flat fee instead of a percentage of gross collected rent. They do not get paid if they don't collect rent.
With the proper tools and information as well as a property manager you can trust, you will be on your way to accumulating wealth through multiple rental properties outside your locality.
Newsweek Article: https://www.newsweek.com/amplify/priced-out-your-local-real-estate-market-heres-how-buy-rental-properties-remotely
