Pompano Beach, FL · Member since 2016 · 18 posts · 0 votes
We are looking at rentals out of our area. We've found some that are currently occupied that would generate a good cash flow, but we don't know the area very well. For those of you that buy rentals out of your area, how do you go about doing it to make sure you're making a good decision? Some of the houses we've found are being sold in a portfolio with seller financing. Should we contact a local PM and/or realtor to look at the houses for us? All tips and advice is appreciated!
Property Manager · Grants Pass, OR · Member since 2009 · 429 posts · 201 votes
10y
Seller financing can be nice, but it also raises possible red flags. Banks will only loan on houses that are compliant with building codes and 100% habitable. I would use extra diligence to make sure these properties are in good shape. I would use a reliable 3rd party property inspector for this which will cost you about $200 - $400 based on the size property.
Before doing that, definitely have a local realtor that's representing you look into it. They will do it on the contingency of making a sale and it shouldn't cost you anything.
If you do purchase out of area, be absolutely certain to be diligent on screening your tenants. Be sure to look at past evictions, credit, and criminal for every applicant. Because you are at a distance, you want to be absolutely sure you are placing respectful and good paying tenants in there. Hiring a property manager to manage them would be a great idea, and building the PM fees into your margin calculations is important.
Las Vegas, NV · Member since 2014 · 732 posts · 137 votes
10y
Laura,
Nice to meet you here on this forum. I am in the land bussines myself but refer my investors to other sources if they want houses. I have a good source that deals with turn key properties in different states. She may be a good source for you. Let me know if I can help futher.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
10y
@Laura Capps, welcome to BP. When you buy out of area it is extremely hard to know what you are getting as just a few blocks can make a huge difference in neighborhood. One of the things I did was make contacts with BP people in the area I was buying in who are not related to the transaction in any way. They told me about areas and even looked at properties for me. It always helps to have a professional give you an opinion as well, like a realtor or property manager. Use the independent information you get from them to aid you. If you are buying several properties I would strongly urge you to go to the location and look for yourself to determine neighborhood and condition. Having a truly neutral person look at the property is a must. I was almost sold a property in an extremely bad area but the outside advice I got saved me. Be very careful, sellers rarely tell you that you are getting a horrible deal.