If investing in local real estate makes sense, investing remotely makes even more. After all life is about expanding your horizons and in order to do this you often have to look beyond your own immediate environment. Simply put: great investment opportunities are never confined to your particular neighborhood, city, or state. Especially when it comes to real estate. With so many opportunities spread across the U.S. why miss out on becoming a remote investor?
Sometimes The Grass Is Greener On the Other Side
It’s human nature to believe that everything that’s best is already nearby. Yes investing locally does mean that you’re already familiar with the area, can drive by the property, and take a hands-on approach to managing it. However while this familiarity is comforting it doesn’t imply that the most profitable investments are confined to your neighborhood. Quite the opposite in fact. Our analysis of first-year returns—or cap rates—for single-family rental properties (SFRs) nationwide in 2016 underscored the Midwest and Southeast as being the most valuable markets; with Cleveland (Ohio), Columbia (S. Carolina), and Birmingham (Alabama) rounding out the top three.
What Remote Real Estate Investors Should Know
Expanding your investment locations goes a long way toward maximizing your returns while mitigating your risk. Select markets throughout the U.S. are seeing record highs, while others are producing solid cash flow. Why?
Remember that the median household cost across the U.S. is typically a lot less than you’d find in ultra-coveted markets like California. This means that you’re more likely to afford multiple investments when purchasing out of state properties. The median home price in Irvine, CA is $769,000 for instance: while in other markets you see the following median prices: $125,400 (Columbia, S.C.), $61,800 (Birmingham, AL), and $52,100 in Cleveland, Ohio (Zillow). As a result you could potentially buy 3 homes in each of these markets for the same price as one in Irvine.
Additionally, vacancies are less impactful to your portfolio when you have multiple properties generating rent. This strategy of creating a portfolio of single-family rentals is called building a “virtual apartment.” This means buying several single family rentals to create multiple streams of income (similar to the concept of owning an apartment building). Since your SFRs are located in multiple markets, they’re less risky than owning a single apartment building in a single market.
Explorers would never have found new land if they had stayed home. Similarly, you may have to look beyond your familiar surroundings in order to find your new wealth. Let’s explore the possibilities together. Take your first step toward becoming a remote investor by calling 888-276-0232 today.