Out of state Lending and Taxes

[Kyle Kaldor]

Hello everyone, I have two questions:

1.  When looking for out of state rental properties, is it generally best to use a lender that is in the same area/state of the property, or can an out of state lender be used?  If either can be used, what are the pro's and con's to each?

2.  For out of state rental properties, does the owner have to pay income tax in that state (given the state has income tax)?

Thanks,

Kyle

[Natalie Kolodij]

Most states tax on on income sourced/earned there. 

So if you earn a rental in another state you will likely have to file a state tax return there and pay tax on it. This is often credited against other states so you don't double pay.