Seven Tips To Invest in a Different City Than Where You Live

In a previous blog post, we explored the pros and cons of investing near where you live versus investing in another area altogether.

Investing elsewhere gives you a number of advantages that you may not get by investing locally: Primarily, you can invest in a location where the fundamentals make the most sense where the opportunity for high quality, long-term rentals is the greatest. If that describes how you like to invest then here are some tips to investing in a different city than where you live:

1. Become familiar with the area you plan to invest. Do your due diligence and build a case for why you should invest in that area. (If you re using your own money, this is an important exercise but if you re investing with other peoples money than they ll want to know your reasons). Visit the area, talk to REIN Members who invest in the area already, check out the neighbourhoods and get to know them as well as you know your own. (Hint: Move beyond what the tourism board says about the city it represents. Read the newspapers and walk around the streets yourself).

2. Remember that it s not just about the neighbourhoods and property types if you re investing in a different province then you re also looking at different laws and tenancy acts. Take the time to look into this and although some of your investing experience will carry over, some of it will be unique to the new area you re investing in.

3. Build a team and establish a great relationship with them. You’’ll probably want some combination of house inspectors, contractors, and property managers on your team. Interview them and consider how well you work with them and how well they’d work together. Additionally, you can also get help from real estate consultants like the ones from Invest with Ben (if you happen to be looking at the Indianapolis market) who can help with the market research and estate inventory of the place.

4. Consider partnering with an investor who is already active in the area, at least on the first deal. You ll share the wealth on that deal but you ll gain first-hand knowledge while leveraging the other investor s experience. Once you ve done one or two deals this way, you ll feel far more confident doing your own.

5. Start small. Many investors are optimists who would to jump into a big deal right away, but if you re just trying to see what it s like to invest in a different area, start with a small property first, such as a single family residence. This limits your exposure while giving you a really good education.

6. Apply the REIN principles they re no different in another city than they are in your own. That means: take your time to find the right property and the right tenants and don t rush into something without doing your research first.

7. Consider studying two or three areas in-depth, even if you only start investing in one. That way, you can study how the fundamentals change in each one and you can shift your investing focus to a new area if another area improves.

Investing in a different area than where you live opens up an entirely new world of possibilities and profits. It gives you the freedom to pursue fundamentally sound opportunities no matter where they are without relying only on the economics of the city you live. And, it s great practice for the day when your investments are delivering enough cash flow while you travel the world!

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