This Ground-breaking, Detailed System Will Show You Everything You Need To Know To Successfully Invest…
How far out of your specific living region would you go to invest? I, personally, deal anywhere, and I would recommend that you be open to dealing anywhere, especially if you’ve got the right opportunity, but never neglect your own backyard.
Now for a lot of people who are located in the higher-priced markets, your dollars translate very well to other, cheaper marketplaces. If you live in a high-dollar area like New York or Los Angeles, you may find yourself experiencing:
- Barriers to entry
- Financially imprudent investments
- No rental growth
- No real appreciation
The fact of the matter is that most areas offer excellent opportunities. If you’re in a high dollar area, you may want to scale down the size of properties that you’re willing to invest in so that you can get started instead of going out of town. If property values are too high for you to afford getting larger buildings in your area and you refuse, or simply cannot overcome your concerns about investing outside of your area, your only choice will be to scale down the size of properties that you want to consider. This is the exception to the rule, not the rule. In this case, scaling down to 4 to 6 unit buildings will be your best option. If you simply cannot get over the idea of investing in other locations, this is your only alternative.
Now, one thing that you need to be concerned about as an out-of-town owner is that you’ve got a lot of opportunity to have what we can call “management inefficiencies”. Worse yet, you might have somebody just flat out stealing from you off of your property. I don’t want to create fear; however, it’s very important that you realize the reality of the situation. When you start dealing in remote properties, there are management techniques and management tools that you will need to learn to manage and monitor your properties.
Now on the other hand, remember your backyard is bigger than you think, and you can become very familiar very quickly with which areas will best serve your investments over the next 5, 10, or 20 years depending on your personal goals.
I personally believe that most of the opportunities that you can find initially will be within your geographic region. People will know you there and you’ll be able to generate leads more easily. You’ll be able to find good opportunities within your region, it will be within your comfort zone, and it’s a great place to start. In every marketplace there are going to be pockets of positive growth, even in the face of otherwise negative economic factors.
I would advocate that you continue to educate yourself. If there’s an area of the country that you have interest in, or an area of the country that kind of piques your curiosity, go out and find out about that area. Today is the time to start learning. When the opportunity presents itself, even though it doesn’t move as fast as residential real estate, it moves quickly enough that it will be here, and then gone, if you have not prepared for it.