Do the numbers really work with out of state investing?
I keep running the numbers with out of state investing, and I don't see how people make this work. Would love to hear success stories/strategies!
Even when I find properties that hit the 1% rule, I just don't see the returns being worth it.
Here's an example in Jacksonville, Florida:
Purchase Price of a townhome: $116,000
Rent: $1,200/month
HOA: $112
MONTHLY PAYMENT WITH 20% DOWN (including taxes, insurance, and HOA): $775
Expenses-->
Property management: 12% of rent or $144
Repairs (since I'm an out of state investor I'll have to outsource ALL repairs) 15% of rent or $180
Leasing agent (first month of rent): $775 (Leasing agent keeps rent and I pay full month of mortgage
Unit turnover (one month): $775
TOTAL RENTAL INCOME PER YEAR (assuming 11 months--> One month turnover): $13,200
TOTAL EXPENSES PER YEAR: $3,888
TOTAL MORTGAGE PAYMENT PER YEAR: $9,300
TOTAL CASHFLOW PER YEAR: $12.00
Sure someone is paying my mortgage down and I definitely used conservative numbers, but I just don't see how this is worth it after putting an investment of ~ $23,000 down. The risk vs. reward just doesn't weigh out.
Sure I could do a BURRRR, but then if you're not in state then you're paying the mortgage, someone to manage it, and taking on high risk.
Do I really have to leave the Bay Area to continue my real estate investment career???
Thanks for reading everyone :-)