Ways to invest in real estate remotely
Whether you plan to own residential real estate or commercial real estate remotely, the key to a successful investment is conducting thorough due diligence on the type of property you're seeking to purchase and the relative market. Be sure to have local experts you can rely on for assistance, such as a contractor, real estate agent, property manager, engineer, or attorney. Know what the laws are for that state, and make sure you've done your homework on the viability of the investment in the long term with the right team of people to help you execute it.
Turnkey real estate is a common starting place for remote investors; because the properties are already rented and typically renovated, there is very little management required of the owner after purchase. However, investors can also engage in flipping houses, vacation rentals, ground-up construction, or converting REO properties into a long-term rental.
Real estate closings can be done by mail in advance of the closing date by having one or both parties sign the required documents and return them via overnight shipping. Any documents that require notaries can be done by a mobile notary or, in certain states, virtually with an e-notary. Tenant leases can be signed and executed with virtual document signing software, and rents can be collected online. With the variety of digital tools available to real estate investors and professionals today, it's actually far easier than most believe it to be.
Tips for investing remotely
I personally have been a remote real estate investor since the start of my investment career. While I have owned real estate in my local market, the majority of my real estate investments have been in other cities and even states from where I reside. With the tools and technology available today, it's easier than ever to monitor a real estate investment from afar. The key is knowing how to identify a good investment from a bad one and seeking advice from local professionals who know the area well and can help facilitate the work needed to maintain and manage the investment efficiently.
A great place to start with the idea of remote investing is to find an investment opportunity in your local market, but instead of being the on-site eyes and ears of the operation, hire a team to do the work for you and practice overseeing their work from your home. Try to avoid going to the property yourself and instead utilize the technological resources available to you to manage the management team. This can include property management software, weekly conference calls, virtual walkthroughs of the units or renovation each week, or a combination of these. It's also important to do the work to find a worthy team. Certain investments may require you to go to the job site regularly for a period of time until renovation work is completed or the business gets established and is operating to your standards. After that, you can begin to manage the investment remotely.
Remote real estate investing is not for everyone. Some investors will never get tired of visiting the property themselves and speaking with the tenants, property managers, or contractors face to face. But for those who are interested in location-independent real estate investing or gaining access to better-yielding or better-priced investments for their portfolio, it can be a great option.