For most people, their backyard is their investment (OK, you can throw in the front yard, the kennel, the house, and the above-ground pool, but that’s it!) …
… for others, the only place that they invest is near their backyard – well, their neighborhood or those close by.
And, it seems to make sense: you understand the area; you can manage your investment; you can (almost) ‘touch’ your investment … lots and lots of ‘warm fuzzies’ around that one.
That seems to be the thinking behind Ryan’s question:
I have a question on real estate investment when you’re nomadic. My concern is I’m young (28) and my girlfriend and I have a list of places we’d like to try living before we settle down (west coast, gulf coast, a big city, etc). Do you tend to only keep rental property near where you live? Or are you comfortable owning property across the country? And if the latter, do you run into any problems with doing that?
My concern is that, if I have enough income/capital to own property, would I be better off waiting 10 years until we decide where we’re going to live long term? Or might I be better off, when we decide to move somewhere, in buying a house, then when we move, trying to keep it as a rental, or something along those lines?
Any tips or thoughts you could throw at me about real estate investing when your location isn’t static?
Ryan, the best place to invest in real-estate is where you will make the greatest return. Seems obvious, but it opens up so many questions about:
– Location: where to invest
– Type: what class of property (residential, commercial, etc.) to buy
… as well as all the usual questions around how much to invest, funding, etc.
I have real-estate in Australia and in the USA, and I happen to be right in the middle of a big ‘argument’ with my accountant at the moment about where I should invest: he thinks locally (easier to manage, handle taxes, etc.) and I think globally (spread risks; greater potential returns; etc.).
Now, you might say that’s OK for me with a portfolio of real-estate, but the reality is that we also have a single condo overseas that we have held on to, as well as a quadruplex, and until recently we kept our old house and rented that out.
In all of those cases, good property managers ensured that we could manage the investments as easily as if we lived next door – almost 🙂
In fact, by investing away from home, you remove the temptation to manage the properties yourself … you focus on increasing income and finding the next deal; let others do the ‘grunt work’ on the existing properties for you.
As to the second part of your question: if you do want to invest in R/E and you see that as your main path to wealth … start now!
Let others wait ‘until’ …
Like that smile after “- almost” – so what tales regarding property management can you tell?
@ Diane – I have to honestly say, not much. We’ve had issues placing tenants, and with understanding some of the financial statements that have come through, but we are still with the same property manager, so that says something positive.
AJC – Can you share some tips on finding the right “team” of people that can help you (mainly not screw you) in this process. i.e.-realtor, contractor, property management company, etc. especially if the property is not in your state (or country).
Also, if investment property is out of your price range in your area (as is the case with me in Southern CA), how do you accurately determine which are the hot markets in your price range?
@ Ryan – Great questions: I’ll try and answer them in this week’s LIVE chat show [ http://ajcfeed.com ] at 8pm CST (9pmEST / 6pm PST) THIS Thursday!
@ Scott – Your dad was – probably 😉 – right! Thanks.