Are you planning on investing in rental properties in Dallas or the surrounding area but don’t know how to get started?
In this article we will provide you with several tips you can use on the smart way for getting started in long distance real estate investing.
1. Be clear on your goal.
This is mission critical for anything you do in life. What is the goal? Is it to have passive monthly income? Is it to gain appreciation? Is it to have your money somewhere besides the stock market? There’s a lot of reasons to get into real estate and investing, and some paths align with goals better than others, so be clear on what you want.
2. Know and understand yourself.
Are you a control freak? Are you hands off? Are you old or young?
This was probably the most interesting part of our discussion because it’s inextricably linked to the goal. I want my rental properties to be hands off after the first month, so I’ve hired a property manager to deal with the day-to-day stress and am willing to absorb that cost for the gift of never thinking about it. But other people in the group disagree, wanting to proactively be involved in their investments.
Another interesting aspect of this topic is age: If you’re younger, you can rely more on an appreciation play and invest in hot markets that aren’t necessarily great for monthly cash flow (this is the only strategy in Denver basically), whereas other people that self-describe as “old” may want cash flow. As they see it, time works against appreciation.
3. Get local by going local.
Two investors lamented that they didn’t know their market well enough before investing. They relied too much on someone else’s whim and ended up in neighborhoods that were problematic. Had they done more research, talked to more people, and studied more maps, they might have known those neighborhoods had crime and other issues. (For crime stats, check out these resources: Trulia.com and NeighborhoodScout.com.)
Still, knowing areas to avoid isn’t the same as being a local. For those of you from Denver, let me just say this: 16th street mall. Out-of-state people get routed here, while locals avoid it like the plague. But how can I know local info without being a local? Pay the money for a plane ticket. Go to that location two to five times before investing. Attend local real estate meet ups. Ask investors what they think of an area. It’ll become pretty clear where to avoid and why.
We Help Out Of State Investors!
Don’t manage your rental property yourself, let us save you the time, money and hassle of managing that property! Square House Property Management by calling us at (972) 523-1389 or click here to connect with us online.