When people are ready to begin their real estate investment journey, they typically think about purchasing a property in their vicinity. While this is not a bad idea, investing in out-of-state markets can often provide better benefits. Real estate broker Robert Tweed shares three of the top advantages of choosing out-of-state properties for your real estate investment portfolio.

Some cities and states have very affordable investment properties that can help nearly anyone enter the real estate industry. Though the terms “affordable” or “cheap” can conjure up images of dilapidated properties, this is not always the case.

While some of these properties may not be in the best shape, others are simply in an area with a lower cost of living. They require lower down payments, lower overall sales prices, and often lower maintenance costs than other locations. If you are looking for affordable properties to begin your investment career or to expand it, Robert Tweed recommends looking into out-of-state properties.

Robert Tweed points out that the country is full of different types of investment properties in a variety of locations. For example, there are condos directly on beaches, studio apartments overlooking city lights, ranch houses in the country, single-family rentals, and much more. By investing in out-of-state markets, you can take advantage of various types of properties, diversifying your portfolio and increasing your potential investment income.

Higher-Producing Markets

Robert Tweed says that diversifying gives you the opportunity to take advantage of properties that produce more favorable incomes. For instance, you can invest in beach vacation properties that stay occupied at a premium price several times throughout the year. This might produce a high return on investment than standard family rentals in lower-income parts of the country.

Investing in out-of-state markets can be incredibly beneficial, but it also presents some challenges. Some of these include a lack of understanding of those markets and the ability to do proper research from a distance. Teaming up with a professional from your area of interest provides a way to overcome these challenges and improve your chances of success.

Additionally, Robert Tweed says you should consider hiring a property management company that can handle the ongoing operations of renting and maintaining your property. Doing so will help ensure you get the most out of your investment, even if you are thousands of miles away.