BEST ANSWER: First find out where you may have to relocate and how much travel may be involved. Then respond to the question.
If there’s no problem, say so enthusiastically.
If you do have a reservation, there are two schools of thought on how to handle it.
One advises you to keep your options open and your reservations to yourself in the early going, by saying, “no problem”. You strategy here is to get the best offer you can, then make a judgment whether it’s worth it to you to relocate or travel.
Also, by the time the offer comes through, you may have other offers and can make a more informed decision. Why kill of this opportunity before it has chance to blossom into something really special? And if you’re a little more desperate three months from now, you might wish you hadn’t slammed the door on relocating or traveling.
The second way to handle this question is to voice a reservation, but assert that you’d be open to relocating (or traveling) for the right opportunity.
The answering strategy you choose depends on how eager you are for the job. If you want to take no chances, choose the first approach.
If you want to play a little harder-to-get in hopes of generating a more enticing offer, choose the second.