Many real estate investment books written for the US market focus on investing close to home. Some will say to stay within 10 miles of your home. Others argue to keep it under 1 hour’s drive. A few investors talk about a maximum of 2-3 hours away by car.
Real Estate Investing (REI) makes sense only if you keep it local is the message. What if the authors are wrong? What if the world has changed?
As someone who owns property that is up to 11 time zones away I clearly do not subscribe to the advice. I even cross country boarders so deal with different legal systems and credit scoring models.
Rather than just argue the case from my point of view let me suggest you read Real Estate Investing Out of State, on the Living the Dream blog.
Two messages jump out.
1. Do Your Own Research (DYOR) when investing at a distance. With the changes brought about by technology change (Internet, mobile phones, low cost travel and communications, express delivery) the extra overhead & cost to research a remote location compared to your own backyard is almost negligible.
3. Some real estate investment strategies are very time intensive and are best done close to home. Other strategies can be applied locally or at a distance with very little marginal cost triggered by the distance. Door knocking on the doors of new foreclosures after the filing of a Notice Of Default (NOD) is clearly best done locally. Mailing or calling owners of NOD property can be done remotely. Meeting face to face on short notice is not something you can schedule when you need to fly to the meeting compared to buying properties that are ready to rent from an agent. Pick a strategy that works given the distance. In the technology sector this is called a business that scales.
Stick to your knitting is a message companies are told when they want to grow. Rather than diversify into other sectors where the company has no competence the company should expand their primary business into more markets. Do what they do best rather than learn a whole new business. If you have a real estate investment strategy that has worked well in the past then maybe you should change where you practice that strategy rather than give up on the strategy when it stops working in your local market.