More often then not, we buy properties sight unseen. And were not talking turnkey properties. In fact, the vast majority of our purchases are sight unseen and it wouldn't be a stretch to say these properties are complete-gut-rehab type properties.
I don’t even really think about it anymore. That’s why I jumped on the opportunity to do this blog post. I had quietly assumed everybody invests remotely and it’s no big deal. Fact is, it can be incredibly intimidating to get started but we're going to dive into all the incredible advantages remote investing offers.
Get Started Investing in Real Estate Virtually
Getting started in virtual real estate can be challenging at first because of the sheer amount of details to sift through. It can be difficult to know where exactly you need to begin. Here is how to get started.
Choose a Market
The beauty of virtual real estate investing is that you can invest anywhere. You’re not limited by your geographical location and you can choose any market in the country. However, endless possibilities can be difficult to narrow down. Here's how we select a market:
Research markets you're interested in. Think about cities or states that interest you. Family favorite vacation spots, hot tourist attractions, or destinations that populate your social media feeds are all great contenders. Use this as a brainstorming exercise and don’t limit yourself on possible options.
Next, consult the data. For first-time investors, this can be a daunting task. With so much information available, what should you focus on?
The three biggest key factors that we look for in a city are:
1. High affordability index rates
2. Growth in population and infrastructure
3. Diversity in companies and industries
High Affordability Index Rates
The affordability index of a market is the measure of an average person’s ability to afford particular items — in this case, a house — based on the median family income. If the affordability index is below 100, it indicates that housing is less affordable. If it’s above 100, then housing is more affordable.
As an investor, seek out cities with high affordability index rates because it shows that residents living there are able to afford the housing. The income wages outweigh the cost of living.
Growth in Population and Infrastructure
Population growth increases the demand for housing. A higher demand paired with a limited supply of housing equated to higher rents and higher values.
Diversity in Companies and Industries
What is a driving factor for population growth? Job prospects. Rather than choosing single company cities where one company provides the majority of the population their job, secure your investments by buying properties in areas with diverse industries and a healthy mix of large employers.
Be mindful when choosing sources as certain articles may be aimed at selling the highlights of the city rather than providing actual facts.
When conducting research, we like to start with these resources:
Census.gov
BestPlaces.net
rentometer.com
Beyond statistics, network with other individuals investing in real estate and seek out as much information as you can. Online forums like BiggerPockets and social media outlets such as Facebook groups can be prime places to gain insider information for markets and industry trends.
Technology and information are at your fingertips; Now may be a great time to make your first out of state purchase. While there's nothing wrong with investing in your local market, you can maximize your investments by growing your portfolio in out-of-state markets. With the right software, and a strong team, you can enjoy securing your financial freedom one city at a time.
