I am looking to buy my first investment home soon, I would like to buy and hold for the cash flow. The question I have is that we will be moving from Rhode Island to the Savannah Georgia aria next summer. I have three options, and would like to get some opinions on them.
I can buy a property here in Rhode Island, and become an out of state landlord when I move. This is the option I like the least, and will probably not go this route.
I can buy a property in the aria that I will be moving to before we move, and be an out of state landlord for a few months until we move, or I can wait until we move to find a property.
I would appreciate any thoughts and opinions that any of you have that would help me make this choice.
@Marc Carlson - I'd suggest waiting until after you move to buy a property in the area you're moving to. The only way I'd think otherwise is if the numbers on rental properties are much better where you currently live and you've already got a team in place (PM, handyman, showing agent, etc.). If the numbers are comparable or the new location is better then I'd say definitely wait to buy. And wait until after you move so that you can get a feel for the rental market and what a "good" deal is. It helps to be able to drive around and look at properties to see where you want to invest. The info provided online just isn't enough for the first property you plan to own long-term.
Marc, if it was me I would start familiarizing myself with the Savannah market now so you can hit the ground running when you get there.
I haven't read it, so I can't fully endorse it, but based on some seminars of his I attended in the mid 2000s, I think David Lindahl's Emerging Real Estate book probably has some information on familiarizing yourself with a new market area. (Though there are probably many others.)
If you do run across a great deal in RI though, with built-in equity, then by all means I'd say buy it here and hire a property manager you trust (RIREIG is a good resource for that of course). If it's not working out after a year, then you can always sell it and try to do a 1031 exchange into something local to you in GA.
And of course, you'll be missed here in RI once you move!
Come on Down. The weather's great!
Certainly never buy in an area you don't know. The hardest lesson I've ever learned is that it's not the deals that get away that hurt you. It's the one deal you get that doesn't turn out to be a deal that kills you every time.
Buying in RI may no be a bad idea if you know the market, if the appreciation is strong go for it. If you're plans to relocate are still flexible you would have a strong case for contemplating a 1031 exchange from RI to GA depending on when you actually move. That would let you lock in all the RI appreciation to purchase the next GA property.
Thank you for the advice.
@Michael Seeker The warm weather is a big reason why I want to move south. I agree that it is a bad idea to invest in an aria that you are not familiar. I will do as Anthony suggested and do the research on the aria before hand. I have enough resources here that I can get a property manager here in RI. I could hold it for a few years, then sell it as you suggest using the 1031 to buy a home in Georgia.
This is something to think about, thank you again for the help.
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