Hi there, is it wise to live in another state but have a property in CA? Or more headache than its worth? I live in CA now but plan to move out of the state soon. I am wondering if it would be wise to get into a property now, spruce it up, and then rent it out with a goal of having a long-term investment and also maybe having a place to stay at when I visit. Thanks!
Is this a property you live in or already rent out. If you currently live in it and it is in an area that is appreciating, you can make sure that it is rent ready: that the rent will support your costs: and bet a good local property manager. Since you may want to stay there while you visit, are you thinking of it as an Air B&B, that has a different criteria.
I am a buy and hold person. We have SF, MF and small apartments and almost all of them are out of state. It is definitely doable but a great Property Manager is really important.
If you can afford the prices in CA. then I guess it's just a matter of where you're going to buy, I live in CA. and I do own 2 properties here but I do most of my investing out of state..again it comes down to spending all your cash in CA., for the price of a CA. home you can buy multiple properties in another state, however, with that said the CA. home, because of the prices will be worth more and bring you higher rents...
Is this a property you live in or already rent out. If you currently live in it and it is in an area that is appreciating, you can make sure that it is rent ready: that the rent will support your costs: and bet a good local property manager. Since you may want to stay there while you visit, are you thinking of it as an Air B&B, that has a different criteria.
I am a buy and hold person. We have SF, MF and small apartments and almost all of them are out of state. It is definitely doable but a great Property Manager is really important.
Is this a property you live in or already rent out. If you currently live in it and it is in an area that is appreciating, you can make sure that it is rent ready: that the rent will support your costs: and bet a good local property manager. Since you may want to stay there while you visit, are you thinking of it as an Air B&B, that has a different criteria.
I am a buy and hold person. We have SF, MF and small apartments and almost all of them are out of state. It is definitely doable but a great Property Manager is really important.
Thanks for your reply! I currently rent in North OC. I’d be interested in living in the prospective home for the next 6-7 months then moving and keeping it as a rental property.
Just not sure that’s wise as it will drain my cash and possibly serve as a headache long term, unless the property manager absolves that?
I like the idea of having it as an Air BNB because it would be nice to visit however that sounds like a bigger headache? Or can property managers take care of that too?
If you can afford the prices in CA. then I guess it's just a matter of where you're going to buy, I live in CA. and I do own 2 properties here but I do most of my investing out of state..again it comes down to spending all your cash in CA., for the price of a CA. home you can buy multiple properties in another state, however, with that said the CA. home, because of the prices will be worth more and bring you higher rents...
James
Thanks James! While the rents are higher, it still wouldn’t likely be a short term investment since they likely won’t beat my mortgage right? More of an appreciation play?
If you plan on buying in CA, are you limited to the OC area? If so, properties there are expensive and oftentimes don't cash flow. If you are more flexible with the location, 2-3 hours north you can find something much more affordable that can cash flow. But in any case, if you own something out of state, definitely use a property manager.
One of my out of State properties mortgage is $440.67 per month in Ohio, it is a duplex 3Bd. 1 Ba. 1692sq. ft. per side. It was purchased in 2017 for 60k… rents were $425/ side per month…after rehab I was able to raise the value to $120k and both sides rent now for $700/ per month per side… per year rent $16,800, my property Mgmt. per year is $1680.00 or 10% each month leaving me $15,120 in rents …my insurance is $1200/ year full coverage .. $13,920 is my take home per year because it was a full gut and I replaced almost everything…nice chunk of change for one property…
In California one of my properties was purchased in 2007 right before the crash for $470k…3Bd. 2 Ba. garage 1107sq. ft. Rents are on the low end $2,500/ per month mortgage is around $1500 … no property mgmt., and my insurance is $726.98 per year… however, when the crash hit my property went from 470k to 225k… but now it’s worth 575k…
so basically I would say out of State is safer but California had a faster rate of return and rents are higher… the exact home in Ohio would be worth a million plus out here…If I were you I would start off out of state and then transition to California properties if you were going to stay in California, if you weren’t gonna stay in California I wouldn’t worry about California properties with all the landlord laws and all the crap going on as a landlord in California I’m just disappointed right now
Hi Justin, I've been a long-distance landlord for a long time, including 2 different SFHs in California and one in Nevada. The right property manager is the key. On the first one we came back to shotgun holes in a wall and a "stolen" car in the garage when the tenants moved out. I thought the PM was a little sketchy when I hired him, but I was new to all this. The second place in California, where we'd lived for 13 years, was a great rental. I started with a property manager but then handled it myself. The Nevada property has benefitted from awesome property managers. In the long run I think they are worth the 10 percent of the rent.
Also, forgot to add that I plan to AirBnB our CA house. We're living in it again but, just like you, I want to be able to use it when I'm here. Currently looking for a rental in Fresno County (where my daughter lives) to replace the Nevada house, which is in escrow.
however, with that said the CA. home, because of the prices will be worth more and bring you higher rents...
Yes, but not proportionate in my experience. IOW, if you pay $500k for 2 houses instead of one, the rents will be higher on the 2 houses. Once again, my experience only! And then there is the pesky problem of having to deal with all the Cali crap as you said....
Hi there, is it wise to live in another state but have a property in CA? Or more headache than its worth? I live in CA now but plan to move out of the state soon. I am wondering if it would be wise to get into a property now, spruce it up, and then rent it out with a goal of having a long-term investment and also maybe having a place to stay at when I visit. Thanks!
Many people have OOS investments, your key to success will be finding a PM to help you manage your property.