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5 Tips for Long Distance Real Estate Investing in 2024

Why is long distance real estate investing so popular in today's real estate world?
Is long distance investing right for you?

Building a real estate investment portfolio in today’s market is proving to be a challenge for both new and experienced investors. Record-high home prices and interest rates make it difficult to secure a property with positive cash flow in desirable locations.

Since many traditional real estate investors are restricted by investing in properties within their general area, many savvy investors are exploring a relatively new option: long distance real estate investing. 

While long distance real estate investing allows investors to acquire properties around the country often for lower prices, there are several challenges and things to consider before getting started.

Keep reading to find out everything you need to know about long distance real estate investing and five tips for success in today’s market. 

What is Long Distance Real Estate Investing?

Here's what you need to know about long distance real estate investing.
Here’s what you need to know about long distance real estate investing.

Long distance real estate investing is an investment strategy that involves purchasing properties located far from where the investor conducts their primary business operations. Long distance investors often target different cities, states, and even countries by leveraging technology tools and remote property management techniques.

Property selection is the most important aspect of long distance real estate investing. Investors spend ample amounts of time researching potential properties in markets that offer favorable investing conditions.

Property management is another key aspect of long distance real estate investing. As with any rental property or real estate investment, maintaining the property and communicating with tenants is key, and with long distance real estate investing, this can be a big challenge. 

Luckily, there are plenty of technology tools that allow long distance real estate investors to manage their properties remotely. Tools like property management software and video conferencing make long distance real estate investing easier than ever before. 

Benefits of Long Distance Real Estate Investing

What are the benefits of investing in remote real estate?

There are plenty of benefits that come with remote real estate investing, some that may be obvious and others that may be overlooked. Here are the top benefits of long distance real estate investing:

  • Access to Stronger Markets: Depending on your location, there may not be much opportunity for profitable real estate investments. With long distance real estate investing, investors can tap into markets with high population growth and strong economic prospects for better long-term investments.
  • Diversification: By targeting properties in various areas around the country, investors can diversify their portfolios across different markets and property types.
  • Better Returns: Return on investment (ROI) is a top priority for real estate investors, and long distance real estate investing may help investors maximize ROI. In markets with lower property prices, investors can take advantage of arbitrage opportunities where property prices are undervalued compared to rental income potential.
  • Outsourcing Property Management: Working with a reputable property management company when long distance real estate investing allows you to outsource the day-to-day operations and upkeep of your rental properties. Outsourcing these tasks frees up time to pursue additional investment opportunities and grow your portfolio. 

Challenges of Long Distance Real Estate Investing

Long distance investing comes with its fair share of challenges.
Long distance investing comes with its fair share of challenges.

While remote real estate investing provides investors with the potential to maximize ROI and tap into markets with better opportunities, there are several challenges and downsides that come with this strategy.

Remote Management Challenges

Property management on its own is hard enough. Add in the dynamics of remote real estate investing, and more challenges present themselves. 

Among the many challenges, the most significant are the logistical hurdles and communication barriers. Investors must have a system in place to manage repairs, respond to tenant complaints, and oversee the property management company’s performance.

Additionally, communication delays and decision-making inefficiencies can lead to property neglect or tenant dissatisfaction which poses a threat to cash flow and ROI for property owners. 

Lack of Market Knowledge

Even with extensive research into long distance markets, investors may still not be experts. They’ll need to have a thorough understanding of market dynamics like property values and market trends if they hope to be successful when investing in long distance real estate. 

Without understanding these key elements of any real estate market, investors may fail to accurately assess the investment potential of properties in various markets.

Legal and Regulatory Environment

Real estate markets have different laws and regulations depending on the state and municipality. Important real estate investing regulations like rental agreements and landlord-tenant laws often vary based on the location and local real estate dynamics.

Investors should also understand the processes for disputes and other financial liabilities before getting started. That’s why we recommend working with reputable legal professionals familiar with real estate laws to navigate the ins and outs of local regulations. 

Depending on Local Partners

As a long distance investor, you’ll have to rely on your local partners to keep the business running smoothly when you’re not in the area. Many remote real estate investors travel to their properties infrequently to check in, but need their management team to handle the main duties of property management. 

It’s also important to choose your local partners wisely. Investors should verify all credentials and be sure that they have a solid track record of working with investors in the past. 

5 Tips for Long Distance Real Estate Investing

Keep these tips in mind when starting your remote investing career.

Now that you understand the benefits and challenges of remote real estate investing, it’s time to talk about our top five tips for success.

Tip #1 – Market Research

As we mentioned, market research is essential for success in long distance real estate investing. Before investing in any specific area, find out important information that indicates a promising long-term investment opportunity in the market

Population and employment trends are two of the biggest indicators that investors should look for. A market experiencing an influx of residents shows that the area is appealing and growing, while a growth in employment shows there are more economic opportunities in the area and people looking for housing. 

Tip #2 – Build a Reliable Team

Without a reliable team, your real estate investing business is likely to underperform, or worse, fail entirely. Your team should consist of local real estate agents, property managers, contractors, and attorneys with stellar track records and positive referrals from past clients. 

Tip #3 – Diversification 

Savvy investors understand that diversification is the key to long-term success in real estate. Luckily for long distance investors, diversifying your portfolio in different property types is fairly straightforward. 

Investors should target different types of properties in various neighborhoods within the market. While single family homes tend to be the most popular investment, investors can also choose to target:

  • Multi-family homes
  • Condominiums
  • Apartment complexes
  • Commercial buildings
  • Industrial properties

Tip #4 – Managing Risk

Managing risk as a long distance real estate investor involves a combination of all the important elements we’ve discussed. It all starts with market research and pursuing only the most promising investment opportunities. 

Additionally, by building a reliable team and diversifying your investments, you’ll have less exposure to market downturns and housing instability that allows you to build a sustainable long-term investing business. 

Tip #5 – Leverage Technology

Real estate investors have so many software tools and technologies available to them that make long distance real estate investing feasible from anywhere in the world. 

We recommend creating a business plan for your investing business and deciding which software tools you need for the essential parts of your business. For many long distance real estate investors, this includes:

  • Property management software
  • Electronic document management
  • Video conferencing
  • Accounting software
  • Remote monitoring systems

Final Thoughts

Long distance real estate investing is now possible due to the technology tools and information available to all investors. 

While investing in real estate remotely comes with several challenges to consider, there’s still plenty of opportunity in the market for new and experienced investors looking to expand their business and build a thriving real estate investment company. 

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