Investing in out of state rental properties

10 Replies

I invest out of state and I do not see the properties before I purchase them. As long as you have a team on the ground who can take a look at the property for you then you should be fine.

Or if you're buying the property from a turnkey provider that you trust and the bank is doing an appraisal then you should be in good hands!

Actually seeing it yourself is not that important.  I own a triplex 30 minutes from my home and I have never actually seen it. I looked at it online, sent out my inspector who noted a possible plumbing problem.  I sent my plumber and he said it was fine.  I bought the triplex and it is under property management.  June was a year and it has been amazingly profitable, I clear 1k a month after expenses.     

I'd say the answer depends. 

If it's a fixer-upper, I think yes you should absolutely see it. Just to confirm exactly where and what you are buying. Even if it's in an area you are familiar with... I grew up in Atlanta and I remember one time finding some properties online that looked fantastic, and I thought the area they were in was pretty good, but when I went to check them out it was terrible. The location would've been a horrible place to invest, and most definitely the pictures made the properties look significantly nicer than they were. 

But if you buy from a turnkey company with a solid reputation, there's a lot in that that you can addition to basic due diligence you do on your end non-locally. I've bought several properties that way sight unseen, and most of the people I work with who buy turnkeys buy sight unseen. I think it's always better if you can go check them out at least once, just to ensure you like what the provider offers, but it's not required and not nearly as risky [in my opinion] as buying a one-off property sight unseen.

I am going to have to disagree with the rest of the kids on this one......I have an 8 unit under contract across the street from one of my apartment buildings. The owner is out of state from North Carolina not that it matters, and never visits his properties. All he cares about is the rent getting paid i'm sure, he doesn't care his property is dragging down the neighborhood. Is your building the one with elmo blankets instead of blinds in the windows? Is your building the one the snow plow hit the retaining wall and never got fixed? Is your building the one with loud parties on the weekends? Is your building the one hurting the rental market on that particular block? Thankfully this will now be my building and I will drive past it or have an employee do so to make sure it is up to my standards. Which will not only enable me to raise the rents on that particular building but also on the 11 units I own across the street. Which in turn will force appreciation on both buildings, maybe you should be visiting your properties..........@Maurice Blackledge

@Maurice Blackledge

i did buy most of my properties unseen because i had a great advisor and solid pm team. we did do inspections of every property and over a three year period, i paid close to $2k in inspections that did not materialize in acquisitions due to various issues.

i do go twice a year to Memphis to check all the houses and make sure they are not a blight in the neoghborhood as @Philip Williams mentioned.

I dont go as much to southern ca rentals which are closer to me because the cities do an inspection annually and if anything is wrong, they inform me.