How to Invest in Real Estate in a City Far, Far Away - Making Successful Out-Of-Town Real Estate Investments in 2023
This article was supplied to us by Rhys Trenhaile, he can be reached via his website.
How to Invest in Real Estate in a City Far, Far Away
In the almost 20 years that Broker Rhys Wyn Trenhaile of The Vanguard Team at Manor Realty Ltd. has been building up real estate portfolios for clients, he’s impressed, yet stunned how over 90% of those clients don’t live in Windsor and never have. Instead they live somewhere far away.
“I’m always amazed at the bravery of being able to invest in a city that is hundreds or thousands of kilometers away from where you live,” says Trenhaile. “Those clients have not only survived, they have thrived and have made massive profits instead of competing with overly plucked and picked apart markets like Toronto or Vancouver.”
So how have they done it? How have they invested in a city so far away?
The first step is getting a real estate agent in that city who focuses on income property sales.
Sound simple enough, but Trenhaile says more than 50% of the investors who come down here screw it up.
“It blows my mind that they either choose a residential real estate agent to sell them income properties or they never just use one. They try to bounce around for the best deal, which is counterproductive.”
The next mistake Trenhaile and his team see is investors trying to stick with the mortgage specialist they’ve used back in their hometown.
“They might walk on water in your city, but they don’t know our city,” he insists. “And they don’t know the nuances associated with getting a mortgage in our city. We see this problem over and over again.”
The third mistake is trying to use your city’s real estate lawyer to close a real estate transaction in Windsor.
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Here is the ugly truth. “The lawyer in your city is going to subcontract the work to a lawyer in Windsor,” he says. “Now we can’t control the quality of that real estate lawyer. Trust me they are not all created equal. Just like real estate agents.”
Trenhaile suggests the following:
Number one.
Establish the core of your power team, which is a specialist real estate agent or a team like The Vanguard Team at Manor Realty Ltd. who focus on income property sales,
Number two. Find a real estate mortgage specialist that is used to financing income property portfolios in Windsor, Ontario. Number three. Hire a local real estate lawyer who knows this market like the back of their hand. Next, you can extend your power team to a top property manager, a top renovation contractor, and sometimes the hardest to find, a top-notch handyman.
“Now you’ve got the power team that will help you on your path to wealth,” he says. “You’ve greatly reduced your risk of failure and greatly increased your chance of profitability.” For example, when you have a good property manager, they are going to keep your vacancy rate lower and rent to better tenants, thus reducing bad debt.
Another example is the real estate agent.
“I always truly feel sad for people that jump around between different real estate agents and think they’re going to get the best deals,” says Trenhaile. “The reality is that those clients who show exclusivity and loyalty to a top agent, get exclusivity and loyalty back from that agent.”
“This means if you were already dealing with an income property specialist real estate agent, they are already getting a ton of the best deals in town and they are never even going onto the MLS system. They are being re-sold to another investor client that the real estate agent knows is always going to use them to build up their real estate portfolio,” he adds. If you bounce around you are not likely getting those deals.
“Therefore, you cannot possibly build as good a portfolio. I’m sorry you can’t. Of course, you think you’re smarter than everybody else, but just know you can’t.
For help building your power team and for further suggestions feel free to reach out directly to info@TheVanguardTeam.com or visit www.thevanguardteam.com.
“Remember that we are all real estate investors ourselves and you are free to use our own power team if you wish.”
Finding a Mortgage When You Are Far Away
If you are looking to buy an investment property in a city that is far away, you need to ensure you are getting a mortgage from a broker that can do business that far out. If you want to learn how to begin financing properties away from home, click the link below for a free strategy call with our team at LendCity today.