Distance from something you care about is almost always a source of anxiety. Whether it’s a loved one, a job, or just something you feel the need to be involved with, we have in us a compulsion to be there. We want to be present to make sure that things are okay.
It’s no surprise then that many new real estate investors feel nervous about investing out-of-state. Still, if buy-and-hold investors truly want to succeed in this business, they have to look outside of themselves and the market they happen to be in.
The conditions which surround you may not always be the best climate to invest in real estate, and you may find that the variety found thousands of miles away in different economic circumstances gives you a greater investing advantage. For example, the actual property costs elsewhere may be much lower than the market you’re currently in, which will help your dollar stretch and enable you to scale your portfolio more quickly as you target other markets.
It also helps as you diversify. You can hedge your real estate portfolio against risk by populating it with investment properties from a variety of markets, so if economic circumstances change in one market, you can rest easy knowing that it won’t bring all of your passive income to a screeching halt.
But how can you possibly overcome the anxiety that comes from investing in markets that are so far away from you?
How to Invest In Out-of-State Markets Worry-Free
Arm yourself with knowledge.
One of the greatest defenses against anxiety is knowledge. If you’re fearful of investing in another market (especially one far away), start learning about it. Investigate. Start making connections with other investors who are there and learn from them what it’s like. There are great resources out there, like on the BiggerPockets network.
Start taking a look at data about the market, like job and population growth, industry diversity, rental data, property values and sales prices, and what data you can gather about past market performance and trends. This will help you assess where the market is headed and whether or not there is stability present.
For a buy-and-hold passive real estate investor, you want the out-of-state markets you invest in to be reliable and stable. These aren’t markets you want to have to worry about—no anticipated sudden shifts one way or the other, no sitting on the edge of your seat. Just slow and steady growth and reliable returns.
Connect with the right turnkey company.
The key to peace of mind when investing in a remote real estate market is partnering with the right turnkey company. This isn’t as easy as it sounds. There is an overwhelming number of turnkey companies out there to choose from and not all of them are going to provide you with a true turnkey experience.
If you really want peace of mind, you have to invest in the right people. People who will provide you with excellent services, experience, and skill to not just manage but grow your investments.
Once you’ve identified a turnkey company that you trust and work well with, you have to keep building on it. There has to be more interaction than when you buy properties or when something goes wrong. Ensure that you’re actually in communication with your property management team and working to relay your vision of success to your turnkey provider.
If you’re engaging your partners in your strategic big-picture planning, they will be able to better help you identify the properties and markets to suit your portfolio.
You’ll build stronger relationships and channels of communication so that you never feel out of the loop or uninformed.
Accept your lack of control.
Finally, you have to accept that as a turnkey real estate investor, you won’t have control of all of the little details. While you will do the big-picture planning and strategizing, the day-to-day operations just aren’t up to you: and that’s okay.
You don’t have to know everything and you don’t have to do everything. Once you accept that you don’t have to control or handle everything and that you aren’t essential to getting it all done, you’re going to find that investing in real estate is a lot less stressful.
Allow yourself to relax. If you are diligent and responsible on the front end in your research and partnerships, you have very little to worry about when investing out-of-state. Don’t let fear hold you back from the opportunities right in front of you!