I live in NY where the taxes are high. I feel I can successful here however, is it a good idea to move to a better rental area where the rental property is more affordable or should try to make it in your area first?
I don't live where I invest, but people on this board do both. Either can work. Good luck.
Yes. You don't pick the market...it picks you. The numbers don't lie...so don't argue. In poker it's called bluffing. In REI, it's called losing money.
I have been struggling with a bit of the same thing. Where I live in NOLA, insurance rates are sky high plus you need/want flood insurance for most properties on top of that. I had wholeheartedly planned to NOT invest in NOLA for those reasons.
Because I'm a fairly new REI, I still wanted to be within a few hours drive of where I was investing. So I started looking at mid/north Louisiana and MS. But, when I started crunching numbers, I was surprised to find that NOLA properties still often came out to be a similar if not better cash flow.
Yes, the insurance is higher and the properties are a bit more expensive...but the rents are also much higher. Plus, for properties more than 90 minutes away, I included a property management fee in my analysis. Whereas, if they're in NOLA or nearby, I could easily self manage.
Bottom line, it's all about the deal! I'd suggest familiarizing yourself with property values, expenses, and rental prices in some of the areas you are thinking about...whether local or farther away. Do a number of analyses. Crunch numbers. It's good practice and you'll start to get a feel for the better areas for cash flow.
Plus, you mention that taxes are high in NY...but is that really true? Or is it just the county you live in? I can't speak for NY, but in Louisiana, taxes can vary a good bit depending on what parish (county) the property is in.
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