Buying an investment property in Nevada is a financially wise decision. And not only because it's a valuable asset that can provide you with a significant passive income. On top of that, it can be a stress-free occupation. You can run a rental business any way that suits you. However, to ensure everything goes smoothly, it's better to choose the location carefully. Both local and long-distance landlords face different challenges and enjoy different benefits. Before you decide, it's best to consider both options. With that in mind, we've decided to examine both possibilities and help you make the right choice. So, local vs. long-distance investing: which is better for Nevada landlords?
How to make the right decision?
Firstly, before you start searching for the right property, you need to ask yourself a few questions. Knowing the answers will help you make up your mind and make a sound decision. So, ask yourself the following questions:
So, what are your financial goals? Do you want to get out of debt, gain independence, or accumulate wealth? To answer this question, you need to first assess your current finances. Then visualize where you want to be in the next five, ten, or twenty years. Knowing this will help you focus your investing in the right direction.
Choose the right market
Next, you need to decide on the right market. For example, you might want to have a high rent-to-value ratio. In that case, you should choose a cash-flow market that will provide you with valuable income. Or, if generating the cash flow isn't your priority, you might want to choose a market with a potential for long-term appreciation. Lastly, hybrid markets offer a mix of both options. Of course, what you decide on depends on your long-term goals.
Self-management or using property management?
To determine your real estate strategy, you need to answer this question. Maintaining the property and dealing with tenants can be pretty overwhelming at times. From the potential renovation of the property to tenants losing their keys for the n-th time, self-managing demands a lot of effort and work.
However, some landowners prefer to be in charge and gladly take on these responsibilities. If that is the case with you, there is no dilemma. In local vs. long-distance, local investment property is a clear winner.
On the other hand, if you'd rather hire a third party to manage your property, both options may work for you. In that case, the key is to find an experienced property management company you can rely on. Whether you choose a local or long-distance property, you'll be able to save both time and effort while they manage your rental business for you.
Local investment property
Now, let's have a closer look at what you can expect from buying a local investment property.
Familiarity with the market
The first and most obvious advantage is that you're more likely to be familiar with the market when you're investing locally. Every local market is unique, and knowing little flows and trends can help you invest in the right property. You'll know all the local attractions and amenities that are likely to attract tenants. However, doing proper research is still a must.
You'll have more control
This is crucial for many landlords in the local vs. long-distance dilemma. While it's not impossible to manage your property long-distance by yourself, it's certainly more demanding. On the other hand, you can choose a more hands-on approach as a local landlord. For example, you can meet with your tenants when necessary, show your property in person, and perform an inspection of the property.
You can hire local contractors when necessary
When you delve into investing in real estate, you're bound to need contractors at some point. Whether you want to remodel that fixer-upper or need some repairs, finding the right contractors locally is much more manageable. Firstly, you can choose them yourself and ensure they're suitable for the task. Secondly, they're less likely to try and take advantage of your absence.
Long-distance investment property
However, long-distance investments also come with their own set of advantages and drawbacks. Let's have a proper look.
A wider range of investment opportunities
Depending on where you live, your local market might not be able to offer you what you want. What if you need cash flow but live in an appreciation market? On the other hand, if you don't limit yourself, you can opt for a more profitable market with a higher return on investment.
If you find the right property in other parts of Nevada, you might even want to relocate there! If the business proves very lucrative, this might be an excellent idea. However, if you want to live nearby, ensure you plan your long-distance relocation with care. From packing your belongings to hiring trustworthy movers - many tasks will require your attention!
Use a property management company
Of course, you can do this on a local level, too. However, limiting yourself may lead to losing some excellent opportunities. And if you plan to hire property managers in either case, a long-distance investment can be a better choice. There are many reasons to hire property managers! Although it may seem a more expensive option at first, it can save you money in the long run. Especially if you don't have a lot of experience - they'll ensure your tenants are satisfied and your property in good condition.
You can use your property for a variety of purposes
While your goal is mainly to rent your property to tenants, you can also use it as a vacation home in between. Or, your kids can use it when they start college - no accommodation worries! And lastly, you might choose to relocate or retire there someday.
The bottom line
As you may see, there are many things landlords should consider when it comes to local vs. long-distance investing. Both options come with their unique advantages and issues. However, once you know your long-term goals and preferences, you'll be able to make the right choice.
Meta description: Buying the right investment property is not an easy task. Find out which is better for landlords - local vs. long-distance investing!
Clark Real Estate
305 W. Moana Ste C
Reno, NV 89509