Real estate investing outside of your local market can propel your net worth.
Investing in real estate opportunities that are located outside your local market, in a metro area you are not familiar with, where you may not know anyone in this particular metropolitan area that you could trust for assistance can be particularly daunting to new property investors.
However, this leap of faith can lead you to some of the best options in your investment decisions and can be the key to amazing success in real estate investing.
Most real estate investors begin investing in single-family homes and rental properties in their local housing market. However, it’s not always a good idea just to invest in your local market. The reality is that some of the absolute best places to invest are in various other markets across the united states, not necessarily in your backyard.
The good news is that there are many more real estate investment opportunities for you “out there” than you could ever imagine. You just have to muster up the courage and trust to explore those opportunities outside of your local real estate market.
Why Everyone Should Consider Investing Outside of Their Local Market
Investing in various areas of the United States that have substantial real estate market growth can help you to achieve your long-term investment goals much more expediently than just concentrating on one local area for a long period of time.
1) Detach From Your Emotional Investing
2) Remove Your Limitations
3) Build a Solid Team Team
4) Focus on Portfolio Diversification
5) Stick With A Plan
#1 – Detach From Emotional Investing
One of the top reasons real estate investors, especially new investors, tend to concentrate on their local market is because it’s simply convenient – they know the area so there is a level of comfort there. They’re willing to sacrifice returns for familiarity. This is the long game and can keep you from getting to where you want to go as fast as you may want to get there.
We’re here to help you understand the different ways you can generate much better returns in a housing market other than your own so that you can make better investment decisions.
Investing outside of your local market helps you to rely more on data and less on the emotional component resulting in better investment decisions overall.
#2 – Remove Your Limitations
It’s highly likely that your local real estate market can only provide a small number of the favorable attributes you would need to really have your investments excel.
By limiting your real estate investments to your local market, you aren’t able to capitalize on a hot real estate market somewhere else or the great job opportunities, job growth, population growth, and other metrics that are creating amazing investment opportunities in these real estate markets for the investors who are investing in them.
Other factors such as real estate prices, property taxes, real estate trends, housing prices, weather patterns, as well as government and state laws all play a part in the overall success of your real estate investment properties and help you to meet your investment goals.
Additionally, when you invest in various markets it allows you to adapt your investing strategy to the market cycles, which is a much more prudent and savvy way to invest.
Removing your geographic limitations to property ownership opens a vast array of opportunities to you, and can possibly help you achieve your financial goals sooner.
#3 – Building A Solid Team
Investing outside of your local market really challenges you to have to rely upon others with expertise such as a professional property manager or real estate agents, a commercial real estate broker, or contractors. There’s just no other way around that, so this is where due diligence and trust will have to come into play.
Building a great team is definitely a skill. Also, learning to rely on that team and leverage their expertise is a learning process, but once you have mastered the ability to build a solid team, you can replicate that process and implement it into other markets which will open up even more investment opportunities to you.
#4 – Focus on Portfolio Diversification
When you invest in only one market, you have essentially put all of your “eggs in one basket”, and that can wreak havoc on your investment portfolio if your local market has a serious downturn due to factors outside of your control like a natural disaster, local economic issues, or local government problems. Because there is no diversification in your real estate portfolio, then there are no other assets in your portfolio to offset any investments that aren’t performing well when the portfolio is limited to just your local market.
A local-only market when investing in real estate doesn’t allow you a strategy for diversification. By investing in various markets in different geographic regions, you are protecting your assets better by creating that diversification within your real estate portfolio and anticipating inevitable changes in market cycles.
#5 – Stick With a Plan
When real estate investors invest outside of their local markets, they have to have a strategy as to how they will be buying or investing in the investment property. As an investor with a clear plan, you won’t be enticed by wanting to invest in say, apartment buildings or residential properties in your local market exclusively just because it’s convenient if the cash flow is not sufficient based on your criteria and your plan.
Investing in various real estate markets requires a plan, a process, research, a team, and solid due diligence on the potential investment to better ensure you will hit your investment goals.
An important factor to remember is that it’s a bit of work upfront, but remember – to find the best deal in the best real estate markets that can help you hit your financial goals sooner should be worth the little bit of extra time and energy.
In Conclusion
Every savvy real estate investor should be exploring investment options outside of their local real estate market. Great real estate deals aren’t necessarily going to be under your nose in your local community, especially with eventual and inevitable market cycle changes. So, it’s best to seek the best cities and best submarket to invest in through every market cycle.
This will help you to find the very best investment opportunities at the best point in the market cycle in these various cities and towns you are investing in.
Here’s A Bonus Tip For You: Consider Passively Investing in Real Estate Syndications
One of the top ways you can quickly propel the growth of your net worth is by receiving regular passive income distribution checks. You can achieve this by investing in multifamily real estate syndications out of state that are located in fast-growing areas of the county with high job and population growth and various other favorable metrics.
This allows you to have a solid team in place such as seasoned, experienced general partners or the sponsor team of the syndication who will be leading the project and the experts designated to know that market inside and out. Additionally, they will also be responsible for overseeing an excellent property management company that will also be “the boots on the ground” and who will know the market and asset very well to help execute the business plan on your behalf.
You, as a passive investor, just get to sit back and enjoy the regular passive income and the diversification that this investment strategy affords you by investing in some of the best markets in the U.S. as well as investing in some of the most desirable (and much-needed) asset classes available such as multifamily apartment communities.
Ready to Learn More?
The best way for you to learn more about commercial real estate syndications is to join the PCRP Passive Investor Club.
Through the PCRP Passive Investor Club, you’ll get a priority review of all the deals we offer. We’ll work with you to determine your investing goals and then present you with the best deals to meet those goals. We’ll then guide you every step of the way as you invest in those deals.
So if you’re ready to start investing passively in institutional-grade, commercial real estate in fast-growing, climate-resilient markets in the U.S., join the PCRP Passive Investor Club – IT’S FREE! – and get started on your path to EARN PASSIVELY and LIVE ABUNDANTLY!
If you would like to know more about what we do and how it may be of value to you, please reach out to us anytime. We’re always happy to help!
