Our world is rapidly changing. It’s uncommon that we would see megatrends unfold so quickly, like we’re seeing today – social distancing, remote working environments, etc. But something interesting is happening due to this new normal – people are still living their lives, the world is still turning, and we’ve figured out how to adapt to these new trends. Who knows if these will be permanent or how long they’ll last, but one thing I predict is there will be lasting impacts, mostly good I’ll add, that will affect each and every one of us.
Some of these trends that macroeconomists and others predict include things like:
The rise of telemedicine
Remote work environments becoming permanent
De-urbanization of large cities
More focus on space and social distancing
With these trends impacting our entire world, it’s important to have a forward thinking perspective as a real estate investor and make sure we’re keeping up with these trends.
Now maybe you once invested primarily in the market you live in. Chances are though, either you or your residents have the opportunity to move to a new location, a new city, or even a new state. This may be a huge disruption to your real estate investing business, or just a minor hurdle you have to overcome.
Let’s look at 5 tips for long distance investing.
Systems and Processes – these will help you automate your business and bring some structure to the way you do things. Systems are the things that help you – software, tools, online resources etc. Processes are the things you do, the way do them, and the order in which you do them, often with the help of systems. Here’s an example of a way I use systems and processes in my business. Let’s look at how I screen new residents. The systems that help me most is the online screening and application software called Cozy.co. This software allows me to advertise my available rental units, collect rental applications, and screen prospective residents. That’s the system. The process looks more like creating a profile for each of my rental properties, uploading lease documents, applications, etc., and activating the listing when I have upcoming availability.
People – real estate is a people and relationship business. While much of the processes of managing a rental property can be done virtually, you still need to have a solid team of people to help you. Relationships with property managers, contractors, realtors, attorneys, accountants, and others are key. With the right people in place, you can outsource tasks to the people who are best and most efficient at carrying them out. The best part is you don’t have to have these people full-time, on staff sitting in an office. In today’s day and age, you can simply hire these team members on a contract basis, using their services when you need them.
Local knowledge – Data is great, but nothing beats local knowledge sometimes. You can research online all the data you want – migration trends, job growth, etc. Sometimes you just can’t beat local knowledge. Every market has its quirks and nuances. Having local knowledge will help you make better decisions. Whether this is knowledge you already have, or knowledge you may have to leverage from local relationships, it’s important to understand the details of the market you’re investing in.
Ability to hire property management – you really should be able to outsource possibly the most important role on your team, property management. Without a property manager, you’ll be self-managing and will eventually be the bottleneck in your own process. Whether you self-manage or use third party management now, make sure you have the ability to outsource this role if/when the time comes.
Pick the right market for the right reasons – you’ve heard the 3 most important things about real estate are location, location, location. This is because you can change quite a bit about your real estate. You can fix it up, paint it, change it’s use entirely, but you...