Location is one of the most important considerations when investing in real estate. These days, remote property investment has started getting a lot of traction, with more and more people investing in far-off properties, based on their requirements and choices.
Is investing in remote real estate really a good idea though?
Many say that remote investment is best for industry experts, who have the experience and the resources to manage various properties from afar. However, with new and attractive investment opportunities opening up in many states in the USA, many investors get lured by the idea of lower tax rates and higher rents, but end up making poor decisions due to lack of knowledge.
As a professional property management company in Columbus, Ohio, we understand what is required to be a successful investor of rental properties. Let’s take a look at whether remote real estate investment is really a good idea for you.
Benefits of investing in a remote property
Favorable property taxes
Across the country, different states impose varying taxes resulting in uneven tax rates. Some states may appear lucrative to investors because of their low real-estate tax rates. These seem highly attractive to real estate investors who are looking for affordable properties.
Possibility of high rent
Big cities are hubs of civilization, attracting people from all over the country who may be looking for jobs or relocating for education. This creates a high demand for rental properties. If you invest in a property located in a big city, chances are that you can earn a handsome amount in rent.
Drawbacks of investing in a remote property
Lack of personal attention
When you invest in a local asset, you can perform drive-by inspections to check on the property, and routine visits also help you keep an eye on your tenants. It discourages them from doing anything illegal and ensures that they abide by the terms of the lease. When you live far from your property, you may not be able to give such personal attention to it.
Handling maintenance becomes difficult
Addressing complaints such as the urgent need for repairs from the tenant becomes complicated in the owner's absence. Since the investor cannot always be physically available for regular inspection of the home, the maintenance issues may tend to get overlooked, unless you hire a property manager to handle the place on your behalf. This ultimately results in a heap of unmet maintenance requirements, causing the owner a great deal of loss.
Vacancies may reduce your ROI
If your investment rental is located in a good location, great. You may never have to face a vacancy. However, if your property is not in a very popular neighborhood or located away from general public amenities such as schools, hospitals, restaurants, parks, and transportation, you may have to deal with the added costs of vacancies and consequent loss of rent. This will hamper your cash flow and lead to a decreased return on investment (ROI).
This is one of the major reasons why investment buyers should contact a local property manager.
Investing in a remote estate can be challenging if you do not have a holistic management plan in place. Hiring an efficient property manager like Solutions for Real Estate (S4RE) can help you earn well and stay stress-free, since your property will be in good hands.
Solutions for Real Estate is a one-stop solution for all your real estate and property management concerns in Columbus, OH. With over 20 years of experience in the industry, we have shown continual excellence in delivering the services. Connect with us to discuss your real estate investment needs.