Investing Near or Far

Ultimately it depends on what your goals are, and what your needs are. I believe in starting with the end in mind, and my personal goal is to do cashflow investing that ultimately require less and less of my time. So I am faced with some challenges in getting there.

I come from Norway where I have been unable to find areas that have investment opportunities for cashflow. The residential property market is heavily skewed towards appreciation. There is of course the commercial property space, but with the financial uncertainty and high taxes, this has been a less than ideal market for some time in my area, and I haven't found any indicators of things changing anytime soon. This has forced me to think of investments outside of my own area. My knee-jerk reaction to the thought was rejection at first. The common advice we investors operate by is “invest local”, and there are great reasons why this holds true for most people or most situations. But ultimately its just a rule of thumb, and there are always going to be times when this doesn't apply.

Lets look at the pros of investing in your local area:

• You know what areas are good and bad.
• You have contacts that can help you out.
• You know where to find any materials you need for your property.
• You are familiar with property prices in the area.
• You can do lots of work on the property yourself, and save money.
• You can more easily follow up the property’s maintenance needs.

There are other benefits too, but this list will do for now. Lets see if we can think of any cons of significance.

• It can be hard to outsource certain tasks, thus becoming more time consuming.
• Overdoing maintenance, thus increasing costs
• Opportunity costs of missing out on better deals in other areas.
• The local market might not offer the desired investment types.

After looking at these factors too, you can ask “What if I could find a market elsewhere, that offered enough cashflow to compensate for the money I can save by doing my own work? Find a partner/hired help to give me the local knowledge on areas and materials?”

What if you committed to do a significant amount of research to find out another areas property prices?

Perhaps, if you can find trustworthy people and a project thats good enough....Maybe it can make sense to invest in another area?