How to Find Rental Managers & the Best Long-Term Investments

◼ Charles says: Ronan, I’m interested in buying a property overseas to use part-time and rent out the rest of the time. But how can I find a trustworthy rental manager?

◼ Ronan says: Hi Charles, the process is pretty much the same no matter whether your rental is at home or abroad.

I don’t know what stage of the process you’re in, but the best way to find a reliable rental manager is to buy in a place that already has an established rental infrastructure.

If you can’t find a rental manager in the place where you buy, it might be because there isn’t enough demand for rentals.

When I invest, I look for “internationalized” places. By that I mean attractive destinations that draw in different kinds of people from different parts of the world. It makes for a thriving rental environment and you can be sure that you’ll have lots of rental managers to choose from.

Once you have your place, ask neighbors and locals who they use and what their experience has been with them. Search online for homes comparable to yours in the same area and see if a certain name comes up again and again.

You might find a rental management company with a website… or a manager who’s working all the vacation rental sites, like Airbnb and VRBO.

It’s crucial that your rental manager has a web presence. It’s the best way to get your home in front of potential renters and keep a steady stream of visitors coming through your door. Look at how appealing the manager makes the real estate on their books seem. Are there nice photos? Good descriptions? Do they make you want to stay there?

If so, you may have found your rental manager.

And don’t get too hung up on getting it right the first time. Finding a good rental manager is a process of trial and error. If you feel a manager isn’t living up to expectations, don’t be afraid to go somewhere else.

◼ Jacob asks: Hi Ronan, I’m looking for a stable long-term investment that doesn’t need to be actively managed. Do you have any suggestions?

◼ Ronan says: Great question, Jacob. And the answer might surprise you…

When I look for long-term real estate opportunities, I start by studying the biggest macro trends at play today. What’s happening in the world that will drive real estate demand for the foreseeable future?

Well, one of the biggest trends I’m following is the growing demand for food. According to studies I’ve seen, the world will need to produce more food over the next 40 years than it has in the previous 10,000 combined. And the United Nations Food and Agriculture Organization says food production will need to increase at least 70% by 2050.

Why? The global population is exploding; the UN predicts a population increase of a couple billion by 2050 for a total of 10 billion.

Plus, millions of people have emerged into the middle class of countries like China and India over the past decade. This booming middle class has more money… and they want to spend it on richer diets with more meat and dairy.

That means demand for arable farmland.

As food prices spiral upward and inflation hits record highs, farmland should be on your wish list as an investor.

Indeed, over the past 25 years, the annual return on farmland averaged 11.5% according to the National Council of Real Estate Investment Fiduciaries’ Farmland Index.

And nope, you don’t need to get a tractor and pull your boots on. (Unless you want to.) Plenty of farmland plays are passive investments.

And while all those new mouths to feed are putting increasing pressure on food production, the land requireed to produce the kind of quantities needed is scarce. Huge swathes of the world’s fertile land are in areas of geopolitical instability… think Ukraine and Nigeria.

That’s not to mention the profound effect of the changing climate on farming, with droughts reducing productivity across the world.

It’s not just arable land that offers opportunity. Farmland prices are increasing, driven by demand from firms that need to meet environmental objectives. These firms have a mounting interest in nature-based solutions for removing greenhouse gasses from the atmosphere.

For example, the largest investment bank in the world, JPMorgan Chase, announced last February that it had bought 250,000 acres of timberland for $500 million. So not only is there a strong market for lumber, there’s also growing value in keeping trees standing, rather than cutting them down.

Due to the strength of this emerging sector, even low-grade livestock land is forecasted to see significant growth in the coming years.

In sum: farmland offers increasing demand in years to come, has been less volatile historically than most other asset classes, and tends to benefit from inflation.

That’s why, for me, it’s the best long-term investment you can make.