Buying Rental Properties out of State

Buying Rental Properties out of State

Investor · San Diego, CA · Member since 2016 · 49 posts · 15 votes

Hey all!

I live in San Diego, new to REI, and want to find buy and hold properties. All signs so far have lead me to markets outside of California and therefore out of reasonable driving distance. I'm ok with that but wanted to see how people have made this work. I would be hiring a property manager but I'm curious as to how much out of state investors have to rely on them. A few questions for those that buy out of state:

1. Do you visit all of your properties before placing an offer or is this handled by your local agent and/or property manager? I assume you would communicate your strategy with them and rely on them to provide valuable and honest feedback of potential properties in terms of rental desirability and required repairs.

2. How often do you or should you visit your property after it has been acquired? I've heard horror stories of properties that are mis-managed and investors only finding this out by driving by the property. Do you perhaps have someone local (friend/family) that you use to periodically check up on your property?

3. How do you best educate yourself on the market you plan to invest in? Some items I've read about include researching the tenant market (i.e., demographics, occupations, locations of large employers, desired features of rental properties), the housing market (are prices increasing/decreasing, how desireable is the neighborhood), and city/state laws and ordinances. Am I over-thinking it or is there a better approach? 

Thanks guys!

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Residential Real Estate Broker · Baltimore, MD · Member since 2015 · 10 posts · 11 votes
10y

I am bias since I live in Baltimore and I also would like to provide you with a chart that one of Bigger Pocket colleagues provided

https://bp-v-newproduction.s3.amazonaws.com/upload...

  1. Baltimore is the 4th largest “commuter shed” in the country. Over 900,000 people commute into Baltimore every day from Baltimore area suburbs. And over 200,000 people every day commute in Baltimore from Washington, DC and Virginia.
  2. Baltimore ranks #18 in the top 25 rental markets in the entire nation. However Baltimore is the only city in the top 25 markets where the rental rate of return is over 20%
  3. Baltimore has one of the most stable economies in the United States, median household income averages $70,000 which ranks #4 in the U.S.
  4. Baltimore’s millenial population has grown 16% in the last 5 years
  5. Baltimore has over 1,000 miles of natural shoreline making it one of the most beautiful places to live
  6. Baltimore gets over 2,000 hours of sunshine a year, rivalling Florida as the “sunshine state”
  7. Over 2.7 million people reside in the region making it the 20th largest metro in the country
  8. High opportunity and relatively low home prices make Baltimore one of the hottest Real Estate markets in the nation
  9. Properties can be purchased in the $70 - $85K range and rents range from $1300 - $1600 a month for 3 - 4 bedroom homes.
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  • Real Estate Investor · Rancho Santa Fe , CA · Member since 2016 · 323 posts · 107 votes
    10y

    Hi @Kevin Longeuay I have bought properties in Wisconsin, AZ, NM, and NV and offcourse CA. and help buy properties in I don't even know but states I didn't even know lol.

    1) if ill by your first purchase out of area, I will fly there and check it out, once you develop a relationship with the agent and trust him you can do by picture or I do face time.

    2) Yeah I try to go every 6 months at least, or I used to go every time I got a new tenant to meet them but that got too much. in AZ I developed a good relation with my Uber driver and I pay him his fare once a month to drive by my properties and send me picture or see if he catches anything weird.

    3) I was a Investment Analyst for a Private equity Fund, so we analysis the markets by Demographic, employment rate, properties on market, market time of rental and of sale, affordability and proximity to basic needs.

    you have any other questions or I didn't answer all your doubts let me know.

  • Real Estate Agent · Irvine, CA · Member since 2016 · 33 posts · 4 votes
    10y
    I've never met my out of state PM, nor have I set foot on my rental, lol Did a lot of research, it's a must!
  • Real Estate Agent · Milton, MA · Member since 2016 · 10 posts · 0 votes
    10y

    Paul, since you have experience in analytics, what are your thoughts on Cleveland, Ohio and Baltimore, Maryland as places for investment purchases? Preliminary research I've done looks promising, but could use a second opinion. 

  • MHP Investor · Green Valley, AZ · Member since 2013 · 85 posts · 26 votes
    10y

    Sfr's or multi? Or is it a mix?

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y

    Welcome to the site @Kevin Longeuay

    Good luck to you & I'll see you around the forums.

  • Residential Real Estate Broker · Baltimore, MD · Member since 2015 · 10 posts · 11 votes
    10y

    I am bias since I live in Baltimore and I also would like to provide you with a chart that one of Bigger Pocket colleagues provided

    https://bp-v-newproduction.s3.amazonaws.com/upload...

    1. Baltimore is the 4th largest “commuter shed” in the country. Over 900,000 people commute into Baltimore every day from Baltimore area suburbs. And over 200,000 people every day commute in Baltimore from Washington, DC and Virginia.
    2. Baltimore ranks #18 in the top 25 rental markets in the entire nation. However Baltimore is the only city in the top 25 markets where the rental rate of return is over 20%
    3. Baltimore has one of the most stable economies in the United States, median household income averages $70,000 which ranks #4 in the U.S.
    4. Baltimore’s millenial population has grown 16% in the last 5 years
    5. Baltimore has over 1,000 miles of natural shoreline making it one of the most beautiful places to live
    6. Baltimore gets over 2,000 hours of sunshine a year, rivalling Florida as the “sunshine state”
    7. Over 2.7 million people reside in the region making it the 20th largest metro in the country
    8. High opportunity and relatively low home prices make Baltimore one of the hottest Real Estate markets in the nation
    9. Properties can be purchased in the $70 - $85K range and rents range from $1300 - $1600 a month for 3 - 4 bedroom homes.
  • Investor · San Diego, CA · Member since 2016 · 49 posts · 15 votes
    10y

    @Account Closed thanks! This site has been great so far

  • Investor · San Diego, CA · Member since 2016 · 49 posts · 15 votes
    10y

    @Yvonne Dupree nice chart! Population and job growth are a couple items I hadn't considered but definitely should. 

  • Boynton Beach, FL · Member since 2016 · 125 posts · 29 votes
    10y
    What are good cities multi-family?
  • Residential Real Estate Broker · Baltimore, MD · Member since 2015 · 10 posts · 11 votes
    10y

    Thanks Kevin.  Glad I could help you

  • Staten Island, NY · Member since 2012 · 58 posts · 4 votes
    9y
    Yvonne Dupree hey can you PM me more about those 70-85k properties that rent out at 1300++ I'm interested
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