Buying and owning property is rarely easy or simple. When the property in question is in a distant location, the challenges multiply. Nevertheless, investing in out-of-state property might seem appealing if you live in an area where real estate is expensive. It might also be attractive if you already own your home but want to diversify your investments.
Regardless, here are the issues to consider before you decide to take the plunge.
Proximity And Access: This one is a bit of a no-brainer. You shouldn’t hire anyone to manage your property who’s not situated close enough to it that they can respond to maintenance emergencies at a moment’s notice. The closer they are to your property, the better. If they’re not managing other properties right in your neighborhood, they won’t be a good fit.
Legal And Local Knowledge: As we mentioned in previous articles, property management without a comprehensive understanding of local real estate laws and regulations is a recipe for trouble. You could end up on the wrong end of a lawsuit if you don’t make certain that your property manager knows the ins and outs of region-specific rules. These things change over time, which is why your property manager will need to stay up-to-the-minute current on all developments so that you don’t have to.
Proof Of Work: Without the property owner nearby, an unscrupulous management company might try to say they’ve performed certain tasks they actually haven’t. And if you can’t rely on them to provide clear proof that they’ve done the work they claim to have done, you won’t know one way or the other. So, make sure at the outset of your arrangement that you’ll receive hard evidence every time they walk the property or perform repairs. Dated pictures of recent inspections are a great place to start. “Before” and “after” pictures of repairs can also help make sense of the amount you’ve been billed.
Investing particularly for low price of entry and high promised yields is very attractive. But the process is not as simple as it may seem, so proceed with caution. If you keep these rules of thumb handy, you may find a reason to travel outside your local market for higher returns.
Key Take Aways
• Buy in a town you know, or get to know the town before you buy.
• Finding a property management team and a maintenance worker are as important as finding a real estate agent.
• Don't just tour the property. Get an inspection.
• The cheapest the cost of the firm is not a good indicator of value. Check reviews!!
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