Many investors have begun buying rental properties outside the cities and areas they live in, and even outside of the markets that make them the most comfortable. If you’re planning to invest in the Boca Raton area from out of state, we recommend you work with a local property management company.
We’re sharing some additional tips to help non-local investors have a good investment experience.
Get Outside Your Comfort Zone
The best advice we always have for people is to go outside of your comfort zone and outside of your market to a region where you can actually make money. Often, people choose comfort or what they know over what will actually make them money. If you dive into the numbers and find a market that makes sense financially for you, then that should be your number one goal when investing out of state. If you are going to invest out of state anyway, you might as well do the research and find the market that will make you the most money.
Analyze the Local Market
As you are analyzing those markets, use the data and the technology that is out there. There’s so much information now, and it can help you analyze new markets and make decisions based on those markets. The number one thing we always look at is population growth. This is important because you don’t want to invest in a city that has a dying population or a slowing population. That tells you people don’t want to live there. If people don’t want to live there, it won’t make sense for you to invest there or buy property there. As the population keeps declining, the demand for your property would become lower and lower.
Check the Local Demographics
You also want to take a look at job growth. You want a market with a growing population and additional jobs growing as well. If the population is growing and the job market is growing, this will allow people to need rental properties, which can bring in money.
Another thing to look at is whether people tend to rent more or own more. What is the average income for people in the area? Is this a middle class town or higher-end area? It’s important to understand the demographic so you know what kind of renter would fit in your property.
Put Together a Real Estate and Property Management Team
Something we always recommend is to put together a team. Two main people you would want on your team would be your real estate agent and your property manager. These two people can help you analyze and get to know a city. They can predict your returns and what you can expect in the market in the area.
Once you start talking to your agents, get to know your neighborhood. If you’re investing in a new town that you aren’t familiar with, get to know the area first eve before flying out there. Making frequent trips to check out multiple areas of interest can get expensive. Use tools like Google Earth where you can put in any address and get a feel for the neighborhood online in front of you. On the top corner of Google Earth, as you walking around the neighborhoods, it will tell you when the video or pictures were taken. Keep an eye on that because a lot of times those pictures and videos can be old. Another great website that really allows you to get a great feel for a place is neighborhoods.com.
Visit the Area
After you have done all the groundwork, and you have found an area where the job market is high, you can make money, you have a great real estate agent, and a great property manager, we recommend you visit the market before you invest.
Take a trip there and really get a feel for the area. Go around and talk to people and really experience the city and see what it’s all about. This is a great way to understand who your tenants are likely to be.
If you have any questions about investing in our market or you need some advice from a Boca Raton property manager, please contact us at Domu Property Management. We’d love to tell you more about investing here.