Live in SF Bay Area - Work Remote - Want to invest out of state.

4 Replies

Hi all,

Long-term lurker. I wanted to get opinions from other investors on here when it comes to my situation. 

I currently work remote in a HCOL area aka SF Bay Area. I've saved roughly 120k across retirement, cash, etc. I plan to stay in the Bay Area for an extended amount of time - family and friends are here. My income isn't very high. 60-75k. Will eventually move up into 100k in a year or so most likely. 

Anyway, I'd like to invest into an out of state property, in a location that has some potential. I wouldn't mind moving to that location for the short term, to live in the unit before renting it out. I won't ever be able to afford housing here in the SF Bay Area. I'd like to eventually own property, and make my money work for me as I age. So I think out of state investing is the go-to move here. Potentially invest in a location with growth.

I've thought about Reno, SLC, Minneapolis. I wanted to get opinions on potential locations, and if any others have done what I'm thinking before. In the end, this could be a good way to hedge against these high rent prices where I live at the moment. 

Thanks for reading. Open to all insight and suggestions. 

Richard

How did you come up with those 3 locations? Was it based on rental returns, price appreciation, etc? The 5 best markets which have the highest historical 4,10,15,20,25 and 50 year returns are Tampa, Orlando, Dallas/Fort Worth, Vancouver Washington/Portland area. All have rental increase of 5% + per year and 7% price appreciation with little in the way of that changing.

Investing out of state will give you a lot of benefits. Just remember that CAP rates are a little different outside of California. We tend to think everything is cheaper relative to SF, so we can tend to overpay. Don't fall into that trap.

A great property manager is also important.

I’m new to real estate investing here in Portland, if you’d ever consider investing here, you should keep in touch. I’d like to start networking here more and we could potentially help each other out if you’re ever interested. It is a great market. I’m looking to buy my first property by Jan. Or Feb. pm me if you wanna talk more.

Hi @Richard N. , my recommendation is to choose cities in safe and economically diversified areas with above-average income and population growth. It can also be safer to diversify your investment properties across the country. There is still good money to be made in AZ, FL, GA, TX and other states, however, picking the right submarkets is key.

A very good source of local analysis is rereport.com

Best of luck!

@Richard N. , welcome to BP! You're in the right place. The Orlando Metro Area is one of the fastest growing in the entire U.S. The metro has added over 400,000 new residents in the last five years alone. The metro has seen 9% appreciation in the last twelve months alone. I have analyzed every zip code in the entire Orlando Metro Area and many are already sitting at 0.60%-1.1% average rent-to-purchase price ratios without even adding distress. Rentals that are in desirable areas (areas I have identified quantitatively as those that command rent premiums against the metro average) usually don't sit more than a week or two on the market. While the actual city of Orlando is very small at about 270,000 residents, the Orlando Metro Area is a staggering 2.4 million. You can't confine your Central Florida rental search to just the small borders of Orlando city proper. You need to look beyond at Winter Park, Altamonte Springs, Apopka, Lake Mary, Winter Garden, Ocoee, Clermont, Minneola, Davenport, Kissimmee, Windermere, and more. 

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