Opinions expressed by Entrepreneur contributors are their own.
With the evolution of technology, remote property investment has never been easier. Many digital tools are now available for managing your property online. If the property market in your area is not conducive to a profitable investment, considering a remote property may be a good option for you. Some investors choose this solution in order to diversify their investments. They invest in another area, or even in another country, without having to set foot in it. If you are interested in this real estate investment method, here are six things you need to know before taking the plunge:
1. Do research on the market
Knowledge of the real estate market is essential for a successful investment. The fact that it is a remote investment does not exclude the importance of doing market research beforehand. This research allows you to determine whether or not the investment will be viable. The knowledge of the market shows the seller that you are serious, and then there will be less of a chance that they will be tempted to raise the price. You will be in a good position to negotiate if the advertised price seems too high in relation to the information you have gathered. These days, it is easier to access certain information such as the average rental price in a city, the property taxes and even the history of the properties placed on the market. This type of information will help you to understand the situation of the real estate market in the city where you plan to invest.
Related: The Rise Of “Virtual Land Lording”
2. Contact a real estate agency
Once you have found a property that looks interesting, the first step is to contact the real estate agent to ask for more information about the property. Since you will not have the opportunity to visit the property in person, you can ask for photos and videos of the property at the same time. Keep in mind that the photos and the videos are sometimes misleading as they show the property at its best. As an investor, you should look for all the defects that may be present in the property. Thus, don’t forget to inspect the important points such as the roof or the common areas. It is also possible to make a virtual visit through a video conference so that you can see the property in real time. At the same time, you can leave your contact details with the agent in question, and you can also ask them to contact you if they have any other such properties in their portfolio. Applying the same process for each interesting ad will allow you to build up a network of real estate agents. This will multiply your chances of finding an opportunity.
3. Build a network of local professionals
Since you will not be on-site most of the time, it is necessary to have a network of local professionals on hand. This network could include contractors, lawyers, concierge services or real estate agents you can rely on if there are any problems with your property. These people will handle emergency situations in order to ensure that your property is still functioning properly. And because they know the area better than you do, they will be able to advise you on the most appropriate approaches with respect to the local situation. These days, it is easy to find information about real estate agents, contractors or other professionals by doing research on Google, Yelp or Angie’s List. You can see if the professional in question is reliable or not with just one click.
Related: How to Get the Most Out of Your Rental Property Investments
4. Doing the administrative procedures remotely
Some people are afraid to invest remotely in real estate because of the administrative procedures. Your agent can give you advice on this subject. Generally, these steps can be carried out remotely, through a video conference under the effective presence of the notary. It is also possible to appoint an agency to represent you. In this case, you must draft the power of attorney letter carefully, because the scope of its mandate is determined by the content of this letter. We advise you to call on a specialist (like a notary) to help you draft a letter of power of attorney.
5. Managing the property remotely
Investing in real estate does not end when you sign the deed of sale. For your investment to be profitable, you must manage it in the right way. In order to achieve this, you do not have to go anywhere. Again, you can choose to manage the property yourself by using online platforms, or you can delegate this task to service providers. Rental management agencies and other professionals are now available to manage your properties. Some of them offer full services — including the management of any works, tenant searches or concierge services. In this case, it is necessary to take these costs into account in your profitability calculation.
Related: Learn How to Confidently Invest in Real Estate
While signing a deed of sale, having the rental lease drawn up and having your rental investment managed without being present may seem dangerous to many, the risk of investing remotely in real estate is really no greater than when investing in your own city. However, you need to set up a system that allows you to act immediately if there are any problems with your property. To do this, you need to have a network of reliable and competent professionals on hand.
