For investors in the long-distance rental real estate industry, building a team you can trust is one of the most important tools for success. Buying and managing single-family rental properties at a distance can be one of the most rewarding investment options available. But doing so profitably requires a team of experts that include experts in real estate, accounting, law, finance, insurance, and property management. To get this team in place, you first need to learn who you need on your team.
As a real estate investor, you need a mentor. While having a supportive mentor can be crucial for any new rental property investor, mentorship carries significant benefits for investors and mentors at any stage of your career. To find a mentor, look for an investor who is where you would like to be in your career in about five years. Offer to help them achieve their goals faster. Chances are, they will be more than willing to do the same for you.
Real Estate Agent
When buying properties long-distance, it goes without saying that you need a real estate agent on the ground in each market where you own properties. Finding a great real estate agent is usually not too hard, but you will need one with expertise in working with investors, not just regular homebuyers. With the right real estate agent on location, you can make both your property search and purchase process much more efficient.
Although few people new to the industry would include a CPA as an important part of your real estate investing team, they are in fact critical to your long-term investing success. Research local CPAs near the location of each of your properties until you find one with experience with real estate investing accounting. Because tax laws vary widely from state to state, you may need a different CPA for properties in different states. Not all CPAs have a comprehensive understanding of the industry or the unique financial and tax challenges that come with it. But finding those who do can make a huge difference in your long-term financial success.
Another important member of your investment team is an experienced real estate attorney. Like a CPA, you’ll need one who knows the landlord laws in each state where you own properties. There are many reasons why you should not neglect to find and hire local attorneys for your team as soon as your investment career begins. For example, your attorney can not only help you interpret landlord/tenant laws in each market, but they should also be able to help you structure your business, assist with closings, and review the wide range of legal documents involved in purchasing long-distance investment properties.
If you plan to succeed in rental property investing, you need to start building relationships with top-rated lenders before you ever make your first purchase. Getting your financing together early can help you understand the terms you’ll need to include in any offers you make. This can be crucial to more accurately analyzing potential deals and help the financing process go more smoothly.
Despite what some may think, not all insurance agents are the same. As a rental real estate investor, you need a hands-on insurance agent with experience in insuring investment properties and understands the important differences between investment owner and homeowner policies. This means that you will need a different local agent if your properties are located in different areas. Although hiring more than one insurance agent may be a challenge, it is still important to shop around and make sure that the agent you choose can help you with your specific insurance needs. Different insurance companies have different specialties and services, so it is important to gather as much information about your options as possible.
Despite being last on this list, great property managers are probably the most important people on your long-distance investment team. The right local property managers will take great care of your valuable investments for you, and charge a relatively small percentage of the rent to do so. That alone is critical to long-distance investing success. But property managers are also highly knowledgeable rental industry experts. They often know local property owners who are open to selling their rental homes off-market, and who might be interested in entertaining offers from up-and-coming rental property investors like you. Local property managers can also offer a wealth of recommendations for the other team members you need, from local real estate agents to insurance agents, repair vendors and more. Consider using a company with a nationwide presence, like Real Property Management, so that when you purchase rental properties in different markets, you know that you’ll receive the same excellent service.
For anyone new to long-distance rental real estate investing, putting together the right team may seem like a challenge. But having the right people in place is essential to keeping your investing goals on track and your cash flows moving in the right direction. For more information on building a great rental property investing team, contact your local Real Property Management office today.
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