Chicago, IL · Member since 2016 · 3 posts · 0 votes
I'm looking to make my first income property investment this year, and hopefully more than one. The thing is, most of the opportunities I'm considering are out of state.
Why am I considering out of state? I can buy more volume. This presents both a tremendous amount of opportunity and risk.
My thoughts are this: buy out of state, buy many properties, hire a property manager to manage the day to day. By buying out of state, I'm also forced in a way to be investment owner, rather than property manager. This distance keeps me away from the day-to-day which would make the income as passive as possible, which is what I want. That and I can accelerate my investment goals, which at the moment is accumulating income properties, more quickly.
Is it crazy to consider my first investment (income, not flip) property out of state? What are things to consider?
Atlanta, GA · Member since 2016 · 81 posts · 45 votes
9y
@Sevan Serafino Welcome to the BP community! Its absolutely not crazy to consider out of state properties as your first RE investment vehicle. Most investors do this for the exact reason you stated, their home state is too expensive for a first investment. However, as its easy to get excited about this, its often better to take it a bit slower rather than rushing into a bunch of properties, especially if you are a new investor.
You'll find that perhaps the most important aspect of owning out of state properties (next to finding the deal), is finding a strong Property Manager (PM). You'll read/hear a bunch of stories on here about poor property managers and how it impacts your cash flow and your properties. If at all possible, you should network your a** off on here and try to get some good references for reputable PM's in your area. Be weary of news articles and 'rankings,' as these notoriously steer investors wrong. Nothing beats a good reference from someone you trust!
I agree with what you said on it making you a stronger owner. It will be more running a business, reading your statements and working with the numbers. Just keep in mind that although a PM is there to help, its still your properties and occasional visits never hurt. Good luck on your journey! We are all here to help!