Buying property out of your area

7 Replies

Living here in San Francisco, I have a small chance of finding any affordable property for investment. I was thinking about investing out of state. I have friends in Texas who tell me that property there is really affordable. What do people think about investing in real estate "out of your area"?

Thanks, Pam

Originally posted by "Pam Hudson":
I have friends in Texas who tell me that property there is really affordable. What do people think about investing in real estate "out of your area"

Pam - go where the money is. If you can't find a deal in your area, go where you can find one. Just make sure you have people you can trust where you are looking. Hire a management company to take care of any properties you buy - but do extensive interviews first.

Do management companies have similar policies everywhere? What I mean is, are the fees they charge standard around the country? Also, what are come of the charges we should look out for? :groovy:

Originally posted by "Darryl":
What I mean is, are the fees they charge standard around the country? Also, what are come of the charges we should look out for?

Hey. I'm not sure about policies around the country, but I've always heard of similar charges. Most will charge you a percentage of the gross monthly rents - usually somewhere between 8% and 12%. In addition, you'll get sacked with some sort of fee for vacant properties (not the property themself, but in finding tenants). I've always heard about 1/2 the first month's rent as a rate. Basically, they charge you to find tenants a cost equal to 1/2 of the rent charged for the unit.

Warning: Just Look out for managers who try to nickel and dime you for tons of little fees here and there. :shake:

WOW! I'm glad there are people out there who care! I appreciate all the feedback. I was thinking similarly to what you said, CashInvestor. Now, I guess I need to find some proper management companies or some reputable agents near my friends in Austin. Thank you all again.

Hey Pam;

One of the things you need to remember is that even though house prices are lower in Texas, rents are proportionately lower as well. Also, property taxes are MUCH HIGHER, fire and EC insurance is MUCH HIGHER and Austin is the MOST EXPENSIVE MARKET IN TEXAS.

Back when I was buying places down here in partnership with my brother (lives in the East Bay) he had to tell me to "quit talking about the property-just tell me how much money to send". He said talking to me was like talking to someone in Mexico who was talking in Pesos instead of dollars.

I'm sure there's probably a management company out there that's worth paying, I'VE JUST NEVER SEEN ONE. No management company is ever going to be as interested or involved as an equity partner. Are your friends financially capable of handling 1/2 of the (initial) expenses and any (unplanned for) shortfalls? Are they handy at all? Do they have the "spare" time to devote to investment property. If so that would be my recommended route.

Just my humble opinion.

all cash

Hey. I too would rather go in with someone I trust rather than pay a management company. There are certainly reputable ones out there. I just like to keep my expenses down. If a partner can help to run your property, all the better. Just my 2 cents.

Originally posted by Pam Hudson:
Living here in San Francisco, I have a small chance of finding any affordable property for investment. I was thinking about investing out of state. I have friends in Texas who tell me that property there is really affordable. What do people think about investing in real estate "out of your area"?

Thanks, Pam

Right now, and I know this is a few years late but Tampa is one of the hottest markets in the country. Jobs are picking back up which means more renters and properties are at an all time low selling for between 10k and on up into the 50k's for a good rental properties.

With props usually renting out at between 500 and 900 per month, Returns are always above 10% but trickle in the mid 20's meaning you can have your money back in 5 years tops and if you decide not to hold onto them long term, you could sell them when the market turns around for huge gains... Just a thought :cool:

Either way, the Tampa market is hot and a person would be crazy not to invest here :mrgreen:

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