Over the years, it is becoming easier for investors in real estate to invest in properties outside of their state, city, or even country. Real estate has always been both about location and people. With increased access to technology and other innovations and changes in the real estate market, investors could now venture beyond their geographical boundaries and search for properties in other places that could provide them with a lucrative income upon investment.
However, many people still do not fully understand how small real estate investment works and its benefits and drawbacks. In this article, Stacked will explain what remote real estate investing is about and its advantages and disadvantages.
What is Remote Real Estate Investing?
As explained in simple terms by Stacked, remote real estate investing works like traditional real estate investing. An investor finds a property, adds it to their real estate portfolio, and gains revenue from it, more usually through appreciation or renting it. However, the main difference is that the property that the investor purchased is located in a different city, state, or even country. If a telecommuting employee can work anywhere, even if their office is located somewhere else, an investor can also look for properties beyond the limits of his or her city or even country.
Because of recent developments in technology, many tools have been created to help investors who have investments in properties in a different city, state, or country. These tools usually include online listing websites where investors could create and manage listings for their properties, drones that could take photos of houses and buildings in multiple areas, and software that could assist in virtual tours and augmented reality for properties. Stacked describes the step-by-step process of how remote real estate investing works:
An investor finds a property in a different location and adds it to his or her investment portfolio.
He or she then hires a property management team that will take care of the property's leasing, maintenance, and rent collection.
Finally, the investor monitors both the management team's performance and the property itself through video conferencing, emails, phone calls, and a monthly financial statement review.
Advantages and Disadvantages of Remote Real Estate Investing
Remote real estate investing is becoming more and more popular and lucrative for a variety of reasons. Stacked found out that investors purchase properties from different cities, states, or even countries for several reasons, such as diversifying real estate portfolios and other locations' real estate markets' profitability. However, remote real estate investing is not for everybody. With that being said, Stacked explains the benefits and shortcomings of remote real estate investing:
Advantages
More opportunities for investing in different properties all over the country or even overseas.
Ability to diversify an investment portfolio to minimize the risks from economic downturns and natural disasters.
Earn more significant returns with less risk by purchasing properties from different locations with higher yields, less competition, and affordable prices.
Disadvantages
Increased risk of overlooking repairs for a property since the investor is not physically present to inspect it.
More time is needed to learn and analyze markets to avoid buying properties in the wrong location.
Challenges of looking for a broker, property manager, or agent who could help the investor grow the property after it was purchased.
Bottom Line
While remote real estate investing has many setbacks and is still in the process of growing, Stacked still thinks that it is always worth giving it a try as it could expand your portfolio and secure your gains and increase your revenue as an investor. If you wish to get more insights and perspectives on real estate investing, you may follow Stacked by going to their Instagram and Facebook pages.
