The property is far from where I live in Mass so I would probably not even visit it. However, even after taking into account the costs of a property manager, the returns are still attractive. What do you think would be the drawbacks I should me more concerned about? Is this investment realistic? Loking forward to your opinions.
My team and I help investors across the country every day and on average they never see the property. They rely heavily on on our team of experts to help with the process from start to finish. Just make sure that you have a good property management team in place so that you can keep up with what is going on in the property. This is why it is called passive income, you don't really have to do anything!
Hi @Santiago Coppoletta, I would recommend investing the time to go and visit the area that you plan to invest in. Here’s why:
1) Risk Reduction - for a typically small cost in terms of time and money you can gain a ton of context about an area and the surrounding areas that will help you to reduce the risk of getting into a poor investment
2) Relationships - you can leverage your time there to meet with local market participants like property managers, brokers, other investors, contractors, potential tenants etc.
3) Business expenses - you should be able to deduct the cost of the trip as a business expense
4) Context / Perspective - you simply get better context and perspective by being there is person
I don’t mean to say that you can’t do OK by investing remotely but I am 100% certain that you will get outsized benefits from visiting your assets periodically and definitely initially.
When I invest in multifamily deals I always visit the area, the comps and the asset itself, this takes time but because we buy 100’s of units at a time it is an efficient use of time.
I’d also be wary of anyone who isn’t personally invested in a deal alongside you telling you that you don’t need to visit, particularly if they get compensated by you making a transaction.
Investing out of state allows us to find the best returns but don’t be mistaken into thinking that you shouldn’t plan on spending time in your target market. Good luck!