Southwest Florida is a lucrative and attractive rental market, so it’s no wonder that many investors buy rental homes here, even if they’re living in another part of the country, or even another part of the world.
It’s not impossible to build your real estate portfolio from a distance. As long as you have a strong local network on the ground in Florida, and you’re adept at using technology for communication, information, and data, you can successfully create a real estate investment portfolio in markets all over the country.
We’re talking about some of the best strategies to prioritize when you’re trying to do this.
The first and most important recommendation when you’re building a real estate portfolio from a distance?
Partner with a local property management expert. This will serve you in a number of essential ways.
Invest in Relationships Before You Invest in Real Estate
There are two pivotal relationships that you need to have in place before you even consider investing from a distance. The first is a real estate agent who knows the local market and can bring you enticing opportunities. The second is a local property manager who can speak to rental values, tenant populations, and then manage your home once you close the deal.
If you’re lucky, you’ll find a professional partner who can do both real estate and property management.
What to look for in a real estate agent:
- Look for a local real estate agent who has experience working with investors from outside of the southwest Florida area. This will help you move through the process with more efficiency and less frustration. You want your real estate agent to understand your investment goals, your timeline, and your budget. You’ll count on them to bring you potential properties that fit those goals and budget.
- Market knowledge is going to be the most important influencer when you’re choosing an agent to represent you. You’ll rely on your real estate partner to show you what kind of properties are available in your price range. They’ll understand local neighborhoods and communities.
- Negotiation skills will also be necessary when we’re talking about choosing an agent. If you’re building a portfolio from a distance, you likely won’t be in place physically to make offers, accept counter-offers, and go back and forth with the seller. You’ll count on your agent to communicate with sellers and their agents. You need an advocate who is in the same area as the property you want to buy.
- Look for real estate credentials and experience. You need a good communicator who will keep you feeling like you’re right there, even when you’re many miles away.
With the right real estate partner, you’ll have a local expert who can show you some good options based on your investment needs and your budget.
What to look for in a property manager
You may think that as long as you have a real estate agent acting as your local eyes and ears, you won’t need a property manager. Especially not this early in the investment process. You’re likely thinking that property managers are for finding tenants and fixing repairs. That’s true, but your property management relationship will help you have a better and more profitable rental experience. Bring in a management partner early.
A property manager has a different set of skills than your agent, and a lot of experience in the rental market. With a property manager working on your team, you will have someone who can tell you:
- How much rent a particular property is likely to earn. Property managers have a lot of data at their disposal, and it’s different from the MLS data your real estate agent is capturing.
- Whether a lot of work will be needed before the property is ready for the rental market. This will help with budgeting and planning for upfront costs.
- How long of a vacancy period you can anticipate, depending on market, demand, and competition.
- What you’re likely to spend on routine, emergency, and preventative maintenance going forward.
Property managers can work with your real estate agent, or you can find a one-stop-shop where there are professionals who can help you buy and sell and a team that can take care of property management. When you bring in a management professional early, you will have someone who knows your property. There will be less time between closing the deal and getting the rental home on the market.
Get Comfortable with Virtual Tours and Digital Showings
You will want to see the properties you’re investing in, even if you’re not booking plane tickets and walking through them yourself. Luckily, technology has made it easy to feel like you’re seeing a property without actually being there, physically. Virtual tours are easy to record and share, and you can take your time looking at each frame and each element of the property that’s important to you. You might even be able to explore a potential investment in more detail than you would if you were actually walking through the home.
Invest in the technology that allows you to tour homes virtually. Your real estate agent should be able to give you a digital tour or take you on a showing while you’re on video chat, FaceTime or Zoom if the seller does not have a video walk-through available.
Ask your real estate agent or your property manager to visit the property for a showing. Ask for still photos of the property, too. This will allow you to stop and focus on specific areas. Take your time perusing the pictures. Ask questions and send your agent back again if there were things you wanted to take a second look at.
A virtual tour can be an effective way to get a visual on your new investment property. Get a live look at the property during various times of the day and night so you know what you’re working with. You can buy a property from any distance, but you want to see it virtually, and you want to see it more than once.
Will tenants want to live there? That’s the ultimate question you’re asking while taking video tours or attending digital showings.
Invest in a Property Inspection for Southwest Florida Rental Homes
You’re not there, so an inspection is going to be even more important than it would be under “normal” or “traditional” circumstances. We know that the market in Florida is competitive. We know it’s fast-moving. Sometimes, waving an inspection is the competitive leverage you think you need to have your offer accepted by a seller quickly.
We don’t recommend it. Especially when you’re investing from somewhere else.
For your own protection, a comprehensive property inspection is fundamental when you decide to purchase real estate that you have never seen and will likely never visit. You’ll want to know about any potential problems, especially when we’re talking about an investment property that you’re required to keep habitable and safe. Is there mold? Will the roof be in danger of collapsing over the next year or two? How much longer do the appliances have in them?
Home inspections will save you money in the long term and protect you against buying a property that won’t make a good rental. You can’t rent out a home with structural issues. You cannot rent out a property that won’t hold up during a fierce tropical storm coming in off the Gulf of Mexico.
Once you receive the inspection report, take a careful and particular look at:
- Structure and foundation. This includes the roof, the basement, the walls, floors, and frames. If there are any outbuildings like garages or sheds, you want those inspected, too. Are the windows wind-resistant? Are there hurricane protections in place?
- Electrical. The wiring needs to be safe and modern. Outdated wiring is often a problem in older homes. Do all the outlets work? If there are problems, make sure they can be easily fixed.
- Water damage. Water can have a serious impact on a property, and if there are leaks or signs of water intrusion, it could be due to plumbing problems or poor construction.
Discuss the inspection report with your real estate agent and property manager. If the inspection unveils extensive damage, a price adjustment might be in order, or you may want to look elsewhere. Talk about potential upgrades and improvements that will not only make your property more competitive on the market, but also bring in higher rents. There’s a lot you can do with this inspection report, and it’s absolutely necessary that you have one.
Building a successful real estate portfolio does not require your in-person presence. Not anymore. Leverage technology and professional expertise locally, and see what’s available to you. This is the best market for your investment dollars.
We work with investors from all over the world. We can help you build a portfolio of rental properties here in the southwest Florida market, and then we can lease, manage, and maintain them for you in a way that’s efficient and profitable. Please contact us at Realty Group of Southwest Florida.
