How Far Away Should You Invest in Property?

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I live in Northern Virginia. And recently, my partner and I got a call from a woman who has houses for sale in Texas, Georgia and Florida. My partner, who’s newer to this business was naturally excited and wanted to know how to figure out if it’s worth it to buy houses that are hundreds of miles away from where you live.

Well, personally, I try and keep my houses within a 60 mile radius of where I live. And quite frankly, I often have to go that far to find the best deals. But any further than that and I pretty much have to hire a property manager. However, as the saying goes, “nobody is going to manage your properties as well as you do.” Of course, that’s true, because you’re the owner and nobody cares about your properties like you do.

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Considering Being an Out of State Landlord?

So, when I’m evaluating a deal that is in another state and far away from me, it pretty much has to be a “home run” for me to want to purchase it. If it’s a deal where I’ll make $100 a month in cash flow, or where I’ll get a little bit of equity then I won’t do it. The reason being is that first, I’ll have to hire a property manager. And you have to factor in the fees of the property manager which are often 10% of the rent every month.

Not only that…

Every time a new tenant moves in, a property manager will keep the first month’s rent for finding a new tenant, or at least a portion of the first month’s rent. As you can already see, the property manager alone is going to eat up a lot of profits so it can’t be an “average deal.”

Plus, what happens when you have to fire the property manager or when there is a major problem with the house. It’s not like you can get in the car and drive a few miles and take care of a problem… Or drive a few miles and interview a new property manager to see if you want to hire them.

Therefore, you might also want to factor in the cost of a plane ticket or two.

Back to the properties my partner and I are currently evaluating, so far it looks like none of them are deals and the woman is upside down on all of the properties (no real surprise there.) Also, on some of them she has those nasty interest only loans that are set to balloon soon.

So, my advice to you is to be very careful of ever buying a house that is not within an hour drive of where you live. Over the years I’ve met plenty of investors who have owned out of state property and only a small percentage of them have had a good experience.

Most of them are like a friend of mine who recently told me about a property in Georgia he owns where he has to evict tenants and he’s having a heck of a time finding someone to do this for him and he can’t get anyone to return his calls.

Simply put, if you choose to get caught up in “investor fever” and buy houses in another state, don’t say I didn’t warn you.

Image: Idea go /

About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.


  1. Jason – I’ve seen the same thing over and over again, particularly with new investors. While savvy investors certainly have the tools to invest anywhere, I strongly recommend newer real estate investors invest in their backyard, or at least somewhere close to home.

  2. Good advice Jason, but what if you live somewhere where: 1. property values are way outside your price range or 2. is a depressed area with little or no real estate investment options. If you find a good enough investment opportunity in another city or state wouldn’t it be better to go for it rather than to sit idle and hope for the market to recover.

  3. Ive had two out of state properties. I lived in Las Vegas,NV (prop 1) and then moved to Columbus, OH (prop 2), and Now i too live in Northern Virginia. I COMPLETELY agree with living within an hour. I am currently finalizing a sale on prop in baltimore because its affordable (arlington va is very expensive, 500K plus for housing). However, I had a successful property mgmt team in NV, and I manage the OH prop myself.

    If you do your due diligence, out of state property mgmt doesn’t have to be a headache. Yes, it can take some of your profit margin each month, but you can get that back in stress free rent collection deposited into your account about mid month. Also, the OH prop is an ongoing endeavor, but as in previous articles regarding tenants, having clear business rules and following through with them works. My tenant isnt always on time, I utilize phone and email. I go visit every 3 mos. The reason its worth it, is because some markets, like Vegas and Columbus, you can buy a house for relatively little and rent for a lot, so the profit you make each month can more than make up for the plane ticket (for me, and 8r drive to cbus). Quite simply, the housing situation where I am not employed full time (NOVA) does not facilitate realestate investing for me, so I have to go where I have lived, or within driving distance (baltimore md for me). My two cents

  4. Mike McKinzie on

    We will have to agree to disagree. Actually, I don’t really “care” about any of my properties. At least not like I “care” for my children. My property managers ( I have 7) care a LOT MORE about my properties than I do. If the property is vacant, the property manager makes NOTHING. For me, it is just an investment, to the PM, it is their livelihood.

    I do not buy property for it to be a hobby or a pet, it is an investment. And as such, the investment comes with costs, including property management. I buy property like I buy stock, the only question is “Do the numbers work?” I NEVER want to see my properties, just like I didn’t go to the EMC plant before I bought stock in them.

    Here is another reason. Last year, I spent $700,000 (cash) on investment real estate. If I had stayed within 60 miles of my house, I would have made about $2,500 a month in rent. By going out of state, I make $7,000 a month rent.

    I have also fired and newly hired three Property Managers in the last two years. All by phone and email. As a matter of fact, of my 7 property managers, I have only met 2 in person.

    While I agree with Josh that an investor’s first property should be close to home so they can learn the ropes, at some point, an investor must realize that better returns may be across state lines.

  5. Paul Timmins on

    Out of State investing requires a team on the ground. Have a team and system in place it will work.
    One of our students picked up 3 SFR in Texas in December, he had them sold right away his profit 130K but he lives 6,000 miles away in another country. He wants to set up 10 teams across the country and do 1 a week.

  6. I’ve got to agree with Paul, having the right team in place can make investing in a market outside of your own a profitable venture. I would add though that it is imperative that you not only do your due diligence on the team you are working with, but that you scrutinize any properties you plan to buy. A $300 plane ticket is a small price to pay if it can save you from making a costly mistake.

  7. Mike mckinzie on

    The whole point of having a team on the ground is so that you do not have to make a plane flight. I currently have thirty rentals and have NEVER seen twenty of them. I have seen pictures and the numbers, my team on the ground does the inspections.

    • Mike,

      I’m not suggesting that you need to fly to see every property you buy out of state. However, if you’re going to invest in a new area with a new team, I believe it would be prudent to see the area in person and get to know the team you’ll be investing with.

  8. No matter what your business, it’s best to work close to where you live. When you’re dealing with something as complicated as an investment property, it’s more important than ever.

  9. Mike McKinzie on

    It is a good thing that Sam Walton and Ray Kroc did not follow your advice. We wouldn’t have very many Wal Marts or McDonalds then.

    And actually, investment property is very simple compared to running a Retail Store, a Restaurant or even a manufacturing plant.

    Real Estate investors really need to get out of the old fashioned mindset that they need to own property close to home and that they need to manage their own properties. I had that mindset for many years! It was not until I got out of that limited thinking that I started to realize great returns.

    Here is a thought, if a real estate investor drives by her/his rental property and thinks to themself “wow, I own that property”, then they should NOT be a real estate investor. They will claim that they are just doing a “Drive By Inspection” but deep down, if they are being honest with themselves, most will admit that they are driving by to brag to themselves about owning it. THAT is when it is a “pet” or a “hobby” and not really an investment. And if you have ever driven a friend or family member by one of your investment properties and told them that you own that, then it really is a “pet” or “hobby.”

    Just remember, there is a much BROADER world of Real Estate Investing out there than just your neighborhood and community. To maximize returns, you need to widen your horizon.

  10. Mike McKinzie on

    One last rebuttal. I own six properties in the Dallas/Fort Worth area and have never been there in my entire life (except for a short 1 hour layover at the monstrosity called DFW Airport).

    With today tools of the internet, smart phones, iPads, etc…., you can pretty much research anything, including your “team on the ground”, without actually visiting the geographical location. With the money I have saved on airline flights, hotels, meals, etc…, I have bought another rental.

  11. Great comments, Mike.

    I’ve been in Thailand for the last seven months, and I’ve bought two houses in Phoenix. One’s rented and the other is just getting finished to be listed for rent. By using Skype, email, the MLS, Google Maps, Craigslist, the county’s assessor and recorder websites, and other online tools, I don’t feel the need to be there in person to get things done. Even though I’m going back to the states next month, I’ll still be an out-of-state investor.

  12. I agree with most of what has been posted. The best way to stay safe is to go where you know the market. I do know some fellow investors who work in up to five markets. They did not start out in all five they were successful in one first.

    I personally believe in a concept I call “staring at the market” . Ask a realtor to send you all the expireds and solds via email. For at least six months spend a great deal of time up to ten hours a week going through every listed house in your prospective price category. Then watch as the close out by expired or sold. After some time you will become very familiar with the values.

    I also personally walked through about 150 houses before I ever bought one. Know have have very little trouble spotting the problems.

    If your looking at houses for sale over a period of time you start to see the patterns in your market. As you would go to a new market it would be good to use the stare at the market tech. before you enter.

    Hope this helps.

  13. I’m two years late in this conversation, but thought I’d awaken it with my entry. I’m not an investor yet, but I’m considering buying property out of state (I’m in Ca and the property is in Lincoln, Ne.) for two main reasons: #1. I have a ‘life’ there (having lived there for years and a graduate of UNL and have friends there) #2. I want my son/family to have roots there also. So, my thinking is..buying the property to rent out, but keep the attic available for when we live there 2 months out of the year. This thread came up when I searched for owning property in another state. I don’t have a direct question, but if anyone has a thought, warning, or comment I’m open to it. thanks

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