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With the evolution of technology, investing in remote real estate has never been easier. There are now many digital tools available to manage your real estate online. If the real estate 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 to diversify their investments. They invest in another area, or even in another country, without having to set foot in it. If you’re interested in this way of investing in real estate, here are six things you need to know before taking the plunge:
1. Do Market Research
Knowledge of the real estate market is essential for a successful investment. The fact that this is a distance investment does not exclude the importance of market research beforehand. This research will help you determine if the investment is viable. The knowledge of the market shows the seller that you are serious, and then he is less likely to be tempted to raise the price. You are in a good position to negotiate if the advertised price seems too high relative to the information you have gathered. Today, it is easier to access certain information such as the average rent in a city, property taxes, and even the history of the properties placed on the market. This kind of information will help you understand the real estate market situation in the city where you plan to invest.
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2. Contact a broker
Once you have found a property that looks interesting, the first step is to contact the real estate agent to request more information about the property. Since you will not be able to visit the property in person, you can request photos and videos of the property at the same time. Please note that the photos and videos are sometimes misleading as they show the property at its best. As an investor, you should look for all defects that may be present in the property. So 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 via video conference so that you can see the property in real time. At the same time, you can leave your contact details with the broker in question, and you can also ask them to contact you if they have other properties in their portfolio. By applying the same process to every interesting ad, you can build a network of brokers. This increases 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 can be made up of contractors, lawyers, concierge services or real estate agents you can rely on if there are any problems with your property. These people handle emergencies to make sure your property is still functioning properly. And because they know the area better than you do, they can advise you on the most appropriate approach for the local situation. Today, it’s easy to find information about real estate agents, contractors, or other professionals by researching Google, Yelp, or Angie’s List. With one click you can see whether the professional in question is reliable or not.
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4. Carry out the administrative procedures remotely
Some people are afraid to invest in real estate remotely because of the administrative procedures. Your broker can advise you on this. In general, these steps can be performed remotely, via video conference in the effective presence of the notary. It is also possible to designate an agency to represent you. In that case, you must carefully draft the power of attorney letter, because the scope of the power of attorney is determined by the content of this letter. We advise you to engage a specialist (such as a notary) to draw up a power of attorney.
5. Remotely manage the property
Investing in real estate does not stop with the signing of the deed of sale. To make your investment profitable, you need to manage it properly. You don’t have to go anywhere to achieve this. Again, you can choose to manage the property yourself by using online platforms, or you can delegate this task to service providers. Rental agencies and other professionals are now available to manage your properties. Some of them offer full services – including all works management, tenant searches or concierge services. In this case it is necessary to take these costs into account in your profitability calculation.
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While signing a deed of sale, having the lease drawn up and managing your rental investment seem out of the question for many, the risk of investing in real estate remotely is actually no greater than 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. For this you need a network of reliable and competent professionals.
