suggest the investor can get the highest rate of return with his or her property. This willingness to invest in any promising location is a radically different approach for many inves- tors. But it is also rapidly gaining in popularity. For some investors, being priced out of their home markets does not mean they can’t find success investing in real estate rentals elsewhere. In a recent arti- cle, Leland Char, a product manag- er in San Francisco, explained that with housing prices out of control in his home city, he decided to buy rental houses in Texas, where prices are lower and rental proper- ties are in demand. Like Char, an increasing number of investors are finding success by investing with- out geographical limitations. WHY GEOGRAPHIC AGNOSTICISM MAY BE RIGHT FOR YOU When looking at geographic agnosticism from a diversification standpoint, the approach fits with the best practices of a modern real estate industry. Financial advisors have long promoted a diverse real estate portfolio as the best strat- egy for investors because diver- sification usually helps mitigate investing’s inherent risks. With properties in different markets, an investment portfolio is less sensi- tive to any one market economy. If losses do occur, they are balanced somewhat by investments in loca- tions that are still profitable. When an investor is not attached to any one location, it enhances his or her ability to profit from strong mar- kets across the nation. Because earning potential is no longer tied to the area in which they live, that potential is no longer subject to
many common barriers to expan- sion and growth. But to adopt an investment strategy of geographic agnosticism, inves- tors must rely on a team of qualified professionals. Arguably, the most important member of this team is an investor’s property management company. Technology has made it possible to hold business meetings and negotiate deals without ever meeting in person. With the right property management firm, invest- ing in real estate is no different. An investor’s property manager becomes his or her on-location representative, providing detailed information about the property and tenants and helping maximize rental income. When investing in many different locations, there are clear advan- tages to adding a national property management firm like Real Prop- erty Management to your team. Rather than spend time vetting a different property manager for each market, investors can streamline their acquisition process with a national franchise, one that offers standardized services in hundreds of locations across 47 states. At the same time, each Real Proper- ty Management location owner is a specialist in the local markets, ensuring that they will assess the earning potential of each rental property to set the most accurate rental rates possible. In this way, investors large and small can achieve a diversified portfolio that is designed for success. •
This content is brought to you by Real Property Management
ADifferentWay to Diversify
rise to the challenge of a changed industry.
WHY INVESTORS SHOULD BE GEOGRAPHICALLY AGNOSTIC WHEN BUYING RENTAL PROPERTIES.
WHAT DOES IT MEAN TO BE GEOGRAPHICALLY AGNOSTIC?
The term “geographic agnostic” is a term with roots in the finance industry. To be an industry agnostic means to be a firm that works in a number of different industries. “Geographic agnostic,” on the other hand, is often used to de- scribe investors who buy in multi- ple geographical locations. What is more, to be geographically agnostic means that an investor does not have an affinity for investing in one place over all others. Investments are made where market conditions
by Stacy Brown
nvesting in residential rental properties remains one of
vesting works. It is natural to want immediate access to and person- al control over one’s own rental properties, but such impulses are not making full use of recent ad- vancements in technology, new real estate platforms, and increasingly professionalized property manage- ment services. These advancements and new ways of doing business have made
a diversified real estate portfolio an attainable goal for investors of all sizes. In the past, a geographically diverse portfolio was the domain of large investors with the resources and contacts necessary to expand operations across multiple loca- tions. Today, more investors are finding geographical diversity a real possibility as lending, real estate, and property management services
the fastest routes to individual wealth. But many small investors unknowingly restrict their portfo- lio’s growth potential by limiting their acquisitions to only properties within a few hours of where they live. This approach to real estate investment comes from outdated thinking about how real estate in-
Stacy Brown is the Operations Manager at Real Property Management, which is the largest residential property management franchise organization in North America, managing tens of thousands of properties for individuals, investors, and institutions throughout the country. Learn more at RealPropertyMgt.com or call 888.806.7088.
26 | think realty housing news report :: august / september 2019
thinkrealty . com / hnr | 27
Made with FlippingBook Online newsletter