Introduction
In this post, I’ll share 3 unique advantages of investing in rental real estate in a market you already visit frequently.
One of the biggest obstacles to getting started on your real estate investing journey is picking where to invest.
The most comfortable answer is usually wherever you live. You know the area well and may even have some contacts for repairs & maintenance issues.
Unfortunately as interest rates and home prices have both soared, most people find they can’t afford to invest in their home markets.
So, naturally, you are forced to look elsewhere if you want to invest. Luckily, there’s a whole country full of options.
Now I know looking at a blank map feels daunting…
But I have an idea for you that has served me well on my journey so far.
Why not start with somewhere you already visit frequently?
There are likely places you go that you’ve never considered investing in:
- Did you grow up in a smaller city or a less expensive market?
- Do you go visit your Grandparents once a year (insert city here)?
- Do you and your family travel to a specific domestic vacation destination every year?
Think of the places that you have real experience visiting and observing with your own eyes.
Now, most folks have the same fears when it comes to the idea of long-distance investing:
Market-specific risk: You don’t know what you don’t know.
- A market may appeal to you based on price-to-rent ratios, cash-on-cash returns or other fancy spreadsheet metrics. That’s great but there are so many “X factors” that will influence your investment’s long-term value.
Cost: Things add up quickly.
- Property management.
- Contractors & repairs.
- Potential travel expenses if something goes wrong.
Lack of oversight: We have all heard the old adage “Trust but verify”
- You can build remote teams on the ground, but the best way to truly know what is going on with your teams & properties is to see them with your own eyes.
Now let’s address those concerns from above and even uncover some amazing benefits.
Here are 3 amazing benefits of investing in a market you already visit regularly:
1: Tax Write-Offs:
If you already visit frequently, you may be able to write off significant portions of your travel expense as long as you perform real estate-related activities (always confirm with your CPA)
2: Day-To-Day Life:
Knowing what day-to-day life feels like will give you an edge in pricing your rental, placing tenants, and understanding trends in your market
3: Networking & Relationship Building
You’ll have an opportunity to build face-to-face relationships with your team members (agent, PM, lender, vendors, etc)
That sounds like a good deal to me…
