How far from your residence should your property be located? There are two parts to this answer. When you purchase a rental apartment close to your home, you can be certain that the tenant will find it convenient to stop by on a regular basis and complain.
There is another thing to be said about living too close to your investment. Your property will probably go on for years with few, if any, problems. But if you are in a position to see it regularly, you will undoubtedly see things going on that you don’t like.
We are not talking about major problem that will affect the appearance of the building or the peace of the tenants, but unimportant things that have no effect on the security or operation of the property.
What about the other extreme? How far away can you live from your investment? This depends on three factors: the size of the investment, the type of investment and the amount of management you have.
A small property being managed by you should be close enough to make it convenient for you to visit the building to show vacant apartments or attend to problems. You don’t want to drive for an hour each time you have a prospective tenant who wants to see an apartment. Engaging someone like friends or relatives to handle these problems will allow you to increase this distance.
If your investment is a large one, where resident management handles every thing, you can live in a different city or state if you wish. The same holds true for easy to manage properties such as sale/leasebacks or even small investments with one or two tenants on long-term net leases. If the lease is a “net” lease to the landlord, the tenant is responsible for all operating expenses and repairs.
Many investors, owning fully managed larger properties, never see them. They live out of state, even out of the country, and rely on the management team to handle their investments. And why should they? Simple, their property managers are probably more qualified to manage the property than the investor himself.
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“Where to find cheap properties?”
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“How important is location to an investment real estate?”
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