Have you ever had the thought, “I wish I lived in a cheaper market” or “I wish I lived in a market with better Cashflow or Appreciation”? Well, the short answer is to invest remotely, but I’m sure you didn’t come here for the short answer. So I’ll share with you my story and the tools you’ll need to find success investing remotely!
So to get started, you’ll need to do some market research; basically find the area you think that you’d like to invest in a meets your criteria. This is a big step in the overall picture, because it does matter where you decide to invest. However, when you’re just getting started, googling top markets for cashflow or appreciation could start to put you in the right general area. Once you have the general idea, it’s time to start looking for a niche location based on the strategy you’d like to implement. So maybe you’re using airbnb and find a really awesome spot where the local airbnb’s are completely filled or basing it off the analytics of a tool like AirDNA. Maybe your strategy is traditional rentals and you use the tool Rentometer to find local comps to plug into your Cashflow Analyzer Template. Regardless of the strategy, you will need to dig deep in this phase to figure out the location piece.
I didn’t start out investing remotely; it actually started when my wife and I moved from our duplex Househack in Minnesota to Colorado. So we had already found the location we wanted to use and the strategy which was Airbnb(referral link). Our strategy using Airbnb, was to offer mid-term rentals (monthlies) and situate our investment property between hospitals, places that require contract work and really just people who needed a more flexible leasing strategy.
You will then need to find an agent that also invests in real estate to work with. You can find an agent with these specifics using BiggerPockets, which is a platform where investors share information. When you connect with an agent that invests, they will have some great ideas for you that may work for them or at the very least, be able to help you find a property with your goals in mind. Most times they also have a referral for a lender that can help you in the area, making this step super simple. However, always shop the lender market to see if there are better options and to protect yourself.
Next, you are going to need to build your team and start automating your processes. My wife and I wanted to be able to control the property from long distance. With Airbnb, you need a key code on your door that you can actively change from anywhere. I’m normally a little paranoid believing people won’t just gain a copy of my key and I’m hyper aware of the protection of my tenants, so the best option was a key code controlled deadbolt. We messed around with some wifi locks for a while, but the problem is that they require a battery change every 2 months or so because they are constantly connecting. So to find the answer to this problem we invested in a security system, Vivint (referral link). Vivint allows us to control access to the doors (Changing access codes from anywhere in the world, have cameras outside of entrances, control temperature, smoke alarms, detect water and so much more. It also provides a feed of recordings for any activity you may need for any contingencies that might happen (Never too safe). The best part is that only the hub is controlled by wifi, which means that the door locks are radio frequency and only need to be changed every 1-2 years (which is sweet!).
Next, you will need a cleaner, no matter what strategy you use for your property. So for Airbnb (and for traditional rentals) you can use the app TurnoverBNB. What’s great about this platform is that you can obtain multiple bids and quotes for your property from cleaners that have also been reviewed. So you know that you’re using a cleaner that has great reviews knowing you can trust their work. Additionally, you can provide a scope of work for anytime a cleaner needs to bring all the cleaning supplies or if you plan to provide anything. TurnoverBNB also syncs your calendar, so when a guest checks out, your cleaner will automatically go to clean your property. So you just give them the access code and that’s really all there is to it. You can also just manually schedule your cleaner for anything you need done as well. If you charge your cleaning fees forward to the guest, then this is just a process that becomes net zero.
Lastly, it’s advised to find a handyman and utilities team (plumber, electrician, HVAC, etc). For the handyman, you can refer back to your investor agent for anyone that they may know. However, you can always submit requests on sites like Angies List for whatever projects you have or need done. For the utilities, there are often companies that will have plumbing, electricity, HVAC and more handled all in one. For me, there’s a company called Ben Franklin that offers all of these services and I’m on the VIP list. Anytime there’s an issue, I can just call them and they will handle it which is fantastic while I live 1,500+ miles away.
An additional last item to account for is landlord insurance. It’s just like homeowner’s insurance with the difference being that you are compensated for lost profit as a result of any damage within the property. I had a pipe burst in my property that took it out completely, but I never missed any revenue for reservations I had previously booked to this point. So it was a huge learning curve getting a water mitigation team in there and then have a restoration company come to restore the property to the point before the damage. However, I also, just handled these events from my phone which was incredible. My network that I had built up, referred me to the right people to get this job done. This really gave me the confidence to believe that I did not need to be in the unit and that my location was actually irrelevant.
Denver has a very expensive market that can be hard to cashflow in (not impossible), so it has me looking for more opportunities in better cash flowing markets as should you. These experiences have led me to realize that building a team and systems can actually make distance investing easier. In today’s world, there’s not a lot you can’t do from a phone so take advantage of this and start living the way you want to live!
Let me know your thoughts by commenting!