With so many markets in Montana just exploding in prices these days, investing outside of these cities and areas, is becoming more and more attractive. What are your strategies, ideas, or thoughts on investing in rural Montana? What do you think would be an advantage to investing outside of the biggest cities in Montana would be? What about the detractors?
I can name a few pros and cons but I would love to hear your thoughts on this.
As for pros, besides a lower price point, the lack of zoning and regulations in many areas of Montana, are a huge benefit to real estate investors, in my opinion. A residential property, can more easily become a business, or multi-family for example. Septic regulations are usually more lax as well. A well can be sunk, as no COSA or plat is stripping away water right. Also with a lower price point, an investor could focus more on a land purchase + new construction, building a ton of equity in their portfolio, which can be leveraged for more property, and then there is always some rental income of some kind with any new unit. Also, the idea of starting and running a business from a property may be a turn off to some, but why not take advantage of that if it can be a highest and best use of the land? STR's, storage units, and even something like a coffee hut can be easy to run, and not far outside the box for a REI. You just cannot do this very cheaply and easily in a city, with many more regulations and fees, than you would have in a small town or county land.
The most obvious drawback is isolation. That brings a whole slew of other problems. Lack of labor and trades. Lack of business. Lack of renters. Lack of utilities in the most extreme cases... To some extent, a lack of an economy. These are some pretty tough problems, but not insurmountable. If your choice of property is still in a decent area, with at least half the year drawing tourism, or having some sort of basic economy, you should be able to fill it. I have often found myself looking at some of the most isolated properties on the MLS, just thinking... How can I make that thing cashflow???
I'd love to hear about some of your most hare-brained and crazy schemes... One time, I saw a property, literally at the top of the Tobacco Root Mountains in SW Montana, out of Sheridan. Hike-in only access, not even horseback! It was basically a 20 acre scree field at a 30 degree angle at 10,000 feet in elevation. Patented mining claim. If you know anything about those, then you know that just about anything goes when it comes to utilizing them. So I figured, at that price, I could helicopter some mortar up to the top of the mountain, and build a rock and timber shelter, and rent it to outfitters on goat hunts with clients, put it on solar and wind, and make it a pack in, pack out type situation. I noticed an outcropping of Earth's crust sticking out of the scree, ideal for attaching something to, and an endless supply of beautiful flat rock for stacking... So then a few years later, I'm looking at local businesses, and I find a similar property in the Tobacco Roots that was actually up and running, although at a much lower elevation, but only a few mountains over... It was called Bell Lake Yurt, and did ski touring in the winter. I still fantasize about building a stone house on top of those mountains, but would it be worth the effort? I doubt it!