There are many good reasons why some people choose to invest in property that is located out of their province. Investing in out of province property might seem appealing if you live in an area where real estate is pricey, if you already own property where you live, or if you want to diversify your portfolio. With that being said you’ll want to do some research before you make an offer, and carefully consider the all of the factors, so that you don’t end up embarking on a costly failed endeavour.
6 Reasons to Buy Out of Province (Investopedia.com).
- Buying property may be more affordable in another province.
- You live in an area like Vancouver, or Toronto where property costs are high.
- You want to diversify your investments by spreading them out geographically.
- Other cities may have property costs that are significantly lower.
- The Return on Investment (ROI) may be more favourable out of province.
- Prices, rates, mortgages, or regulations might be better in another province.
Challenges to Consider
When you invest out of province, you must overcome your lack of knowledge of the new setting, and become familiar with its local economic conditions at the city and neighborhood levels. You won’t have the same understanding of the best and worst neighborhoods as you do in your home city. This means that you’ll have to rely on sound advice, research, instincts and the opinions of any professionals that you come in contact with.
Additionally, it is essential to talk with property owners in the area to gain a true appreciation of the local regulations. You want to be able to compete with local investors that already know the lay of the land. For this you’ll need good contacts in the new locale, as well as the advice of quality professionals such as real estate agents or property managers, so that you can make accurate business decisions when the time comes.
The Secret to Success
The secret to many out of province investors’ success is in locating and retaining the services of a reputable property management company. They will be able to assist you with filling vacancies, collecting rent, making repairs and handling emergencies. If you are not there in person then you won't be there to keep a close eye on your tenants' behavior or their treatment of the property, nor will you be there to collect payment if the rent is past due. If you live close to the property that you own, then you might choose to manage it yourself, but if you live far away, a professional property management company is a necessary expense to protect your investment.