Keep Your Real Estate Where You Can Watch It

If I own property directly, I want to be close enough to check on it. Hiring a manager does not remove my responsibility to understand what is happening. The more places I have to visit, the harder that becomes.

Why I prefer one area

I have seen friends spread properties across several states and rely on other people to manage them. That creates more distance between an owner and the condition of each property or business. I prefer a concentrated area where I can visit and ask questions myself.

A local manager is not automatically the answer

A local property manager can help. I would still check in, because the manager may not have the same stake in the outcome that I do. My concern with short-term rentals is another example of why the operating work belongs in the investment decision.

Owning real estate through a public company

There is a different way I have taken real-estate exposure outside my own area: owning shares of a publicly traded home builder. I did not own its individual properties or manage them. The company had its own professional managers. That is a different set of risks from owning a rental house directly.

I still have to understand the company, what it owns and what I am paying for its shares. Why I read financial statements first explains part of that work.

The point is to know what I can actually oversee. A distant rental and a share in a public company are not the same investment merely because both are tied to real estate.

Choosing your route

There are tradeoffs among owning and managing property, hiring help, and buying shares of a real-estate business. Capital, time, management ability and knowledge of the underlying business all matter. Buying shares may take less day-to-day work if I already have capital; direct property work can require more of my time. I want to choose the route whose work and risks I understand.