Real estate investing is one of the best ways to hedge against inflation, generate consistent cash flow, and take advantage of appreciating assets. In fact, real estate investing is one of the three ways that famed investor Warren Buffet recommends to build generational wealth.
A new phenomenon that is gaining popularity is virtual real estate investing. This fairly new investing strategy allows you to buy and invest in real estate while sometimes hundreds or thousands of miles away.
Is virtual real estate investing worth it in 2023? This article discusses virtual real estate investing, how it works, and if it’s right for you and your investing strategy.
What is virtual real estate investing?
Virtual real estate investing is the ability to invest in properties through the internet, often without seeing the property in person. With online tools like Zillow, Trulia, and Realtor.com, you can browse thousands of listings, schedule virtual tours, and submit offers on homes that are outside of your immediate area.
Virtual real estate investing benefits
Virtual real estate investing has its pros and cons. Here are just a few of the benefits you’ll find if you decide to invest using virtual real estate:
- Remote real estate investing. Virtual real estate investing allows you to run your real estate investing business remotely without seeing your investment property or doing general maintenance yourself.
- More deals. You can acquire more real estate deals with virtual real estate investing since you don’t need to tour each home and go through the typical home buying process. Acquiring more deals allows you to scale your real estate investing business faster than if you were investing in properties the traditional way.
- Buy homes for less. Virtual real estate investors may be able to get a better deal on their investments since they often buy the home as is and waive contingencies in order to secure the deal.
Drawbacks of virtual real estate investing
While virtual real estate has some significant benefits, it’s certainly not right for everyone. One of the biggest drawbacks that deter most potential virtual real estate investors is that virtual real estate investing may be riskier since you buy properties without seeing them in person.
Additionally, virtual real estate investing can be difficult to manage and maintain. Someone will need to be present at the home periodically for general maintenance. This means you’ll need to hire a team to handle property management and dealing with day-to-day issues that your tenants face, which eats into your profit from the rental income.
Lastly, virtual real estate investing in other states can be difficult since each state has their own laws regarding real estate. Laws surrounding security deposits, property rights, and contracts vary from state to state, so investors must be knowledgeable in all areas of real estate investing.
Virtual real estate investing is a relatively new type of real estate investing that is becoming more popular among young investors. Online tools allow you to virtually tour homes, communicate with real estate agents, and make offers faster than before. However, virtual real estate investing has some drawbacks you should consider before deciding on this new investing strategy.