Out of state investing
Member since 2025 · 3 posts · 13 votes
Out of state investing
Most Popular Reply
Randall AlanPro Member
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votesQuote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
Hi Victor,
The proposition of buying property out of state comes with some associated "givens". If you buy out of state, you are necessarily going to be using property management. You might say, "Why yes, that was the plan!" But there is a counter balance to doing that - and that is the expense of it.
The best way I can explain it would be to give you a fast example. Let's say you make $300/month free and clear after principal, interest, taxes, property insurance, and a maintenance reserve each month on a financed out of state rental. So your expected "net" income is $3,600/year if you were self managing a property locally).
Now let's put that property a state away, and bring in the property manager. Let's say your rent is $1,200/month. The average property manager is going to take 10% gross each month, and when there is a turn-over, they usually charge the first month's rent to place a tenant. (We'll neglect the vacancy rate of 2-4 weeks that probably comes along with that as well just to not make the example too extreme.)
So the property manager is going to take $120/month for his monthly fee, and $1,200 for filling the unit. Of the potential $3,600 you thought you were going to make that year, the property manager just took $2,640. That would be 73.3% of your potential net profit for the year. And this scenario presumes you didn't have any significant repair costs to cover as well. There are obviously a lot of other benefits to owning an investment property besides cash flow... but it is the cash flow that allows you to hold onto the property as you gain appreciation, and mortgage pay down, and take advantage of tax write-offs. Some would argue that low cash flow is acceptable. I would agree you will always make more off of appreciation... but for myself, I actually live off the cash-flow of our portfolio... so it isn't acceptable for me personally -and I don't think it is smart from an investment perspective because it puts you more at risk. So... food for thought there.
I would personally suggest trying to buy something local if it makes sense and avoid those fees. You gain a lot of experience along the way as well which will make you a smarter RE investor down the line. Honestly it is really quite easy. One of the biggest secrets is to subscribe to a cloud-based property management platform. We use one called Rentec-Direct - but there are dozens of them other there. They will collect your rent, screen your tenants, broadcast your rentals, track your expenses, and so on. They are very affordable and make life a lot easier.
Keep in mind that borrowing money (Home equity loan) to borrow more money (mortgage) creates 2 expenses you have to overcome each month. You will have a higher payment each month to try and cover if going that way.
Be sure to consider what happens if a tenant quits paying rent, and then doesn't move out and you have to evict them - from a state away... (read attorney fees, filing fees, a month or two of lost rent as well where you have to pay the mortgage, plus the Home Equity loan out of your own pocket). It's not that it happens all the time... but it does happen. You need to make sure you are financially stable enough to absorb those types of things, plus if anything big breaks... like a $5,000 AC bill, or needing to replace a roof, etc.
It's not that I'm trying to paint a bleak picture... I just don't like to see a beginner think it's all going to be blue sky and butterflies and then run into what should be somewhat expected complications. We had a bad run on air conditioners last summer and had to replace 7 units in 2 months! That was $30-35,000 in maintenance we had to cover. Just starting out that won't be you - but $5,000 just starting out is big enough!
As you build a portfolio the nice thing is that the other units kick in to help cover / offset high expenses another unit might run into. But just starting out where you just have one or two is probably the most dangerous time as far as finances go if you aren't deep on cash. So I offer those cautions to you.
We do long term rentals. They are fairly stable, but will net less money than short term rentals as a whole. Out of 37 units we self-manage, we probably turn over 2-3 a year.
Otherwise, as far as loans go - I would say that very little cash flows well when financed at 7% interest rates. Too much of your money is going to the bank in the form of interest. With the high rates we are at right now, I would probably suggest a shorter term adjustable rate mortgage with the intent to refinance it down the line (presuming you think mortgage rates will eventually fall back down).
You have to find really good deals where you can net a descent cash flow to make it make sense to buy something. Don't buy something because it cash flows $100/month. Your money is way better off sitting in the bank earning 4% interest in a savings account in my opinion. It's just not worth the hassle of tenants and risk of potential expenses if you ask me. For us, our line in the sand on a financed property is that it has to make at least $300/month/door. So a duplex would be $600/month after principal, interest, taxes, insurance, and a maintenance reserve. As you do own properties longer, you do benefit from rent increases to help you make some more money, and there is always the option of refinancing higher interest mortgages down to lower ones at some point.
Hope some of it helps!
Randy
20 Replies
- Attorney · Salt Lake City, UT · Member since 2025 · 144 posts · 180 votes1y
HI Victor!
Investing in out-of-state real estate for long-term rentals can be a great strategy—especially for first-time investors who live in expensive or less landlord-friendly markets. By looking out of state, you can often find properties with better cash flow potential, lower entry prices, and more favorable regulations for landlords. The key to success is thorough due diligence: you'll want to research local market trends, economic drivers (like jobs, schools, or colleges), property taxes, and rent demand. Choosing a stable, growing market is crucial. You’ll also need to assemble a reliable local team, including a property manager, contractor, and real estate agent, since managing from a distance comes with its own challenges. It can absolutely work, but only if you treat it like a business and have systems in place for maintenance, rent collection, and tenant screening.
As for using the $60,000 in home equity, you have a few options depending on your goals and risk tolerance. A Home Equity Line of Credit (HELOC) is one of the most flexible tools—you can borrow from it as needed (like a credit card), and interest is usually lower than other types of financing. It works well if you plan to buy, rehab, or fund multiple deals over time. Another option is a Home Equity Loan, which gives you a lump sum at a fixed interest rate and term—this can be ideal if you're purchasing a property outright or covering a large down payment. Finally, for more aggressive investors, a cash-out refinance could be considered—this replaces your current mortgage with a larger one, giving you cash out of your equity, but it resets your loan terms and could raise your monthly payment. Each option has pros and cons, so the best choice depends on how soon you plan to invest, how much of your equity you're comfortable tapping, and how you want to manage repayment. If you're buying a long-term rental and plan to hold it for years, using home equity can be a powerful way to get started without saving up all over again. Just make sure the rental cash flow can comfortably cover your new debt payments.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication. - 1yRandall AlanPro MemberInvestor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
Quote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
Hi Victor,
The proposition of buying property out of state comes with some associated "givens". If you buy out of state, you are necessarily going to be using property management. You might say, "Why yes, that was the plan!" But there is a counter balance to doing that - and that is the expense of it.
The best way I can explain it would be to give you a fast example. Let's say you make $300/month free and clear after principal, interest, taxes, property insurance, and a maintenance reserve each month on a financed out of state rental. So your expected "net" income is $3,600/year if you were self managing a property locally).
Now let's put that property a state away, and bring in the property manager. Let's say your rent is $1,200/month. The average property manager is going to take 10% gross each month, and when there is a turn-over, they usually charge the first month's rent to place a tenant. (We'll neglect the vacancy rate of 2-4 weeks that probably comes along with that as well just to not make the example too extreme.)
So the property manager is going to take $120/month for his monthly fee, and $1,200 for filling the unit. Of the potential $3,600 you thought you were going to make that year, the property manager just took $2,640. That would be 73.3% of your potential net profit for the year. And this scenario presumes you didn't have any significant repair costs to cover as well. There are obviously a lot of other benefits to owning an investment property besides cash flow... but it is the cash flow that allows you to hold onto the property as you gain appreciation, and mortgage pay down, and take advantage of tax write-offs. Some would argue that low cash flow is acceptable. I would agree you will always make more off of appreciation... but for myself, I actually live off the cash-flow of our portfolio... so it isn't acceptable for me personally -and I don't think it is smart from an investment perspective because it puts you more at risk. So... food for thought there.
I would personally suggest trying to buy something local if it makes sense and avoid those fees. You gain a lot of experience along the way as well which will make you a smarter RE investor down the line. Honestly it is really quite easy. One of the biggest secrets is to subscribe to a cloud-based property management platform. We use one called Rentec-Direct - but there are dozens of them other there. They will collect your rent, screen your tenants, broadcast your rentals, track your expenses, and so on. They are very affordable and make life a lot easier.
Keep in mind that borrowing money (Home equity loan) to borrow more money (mortgage) creates 2 expenses you have to overcome each month. You will have a higher payment each month to try and cover if going that way.
Be sure to consider what happens if a tenant quits paying rent, and then doesn't move out and you have to evict them - from a state away... (read attorney fees, filing fees, a month or two of lost rent as well where you have to pay the mortgage, plus the Home Equity loan out of your own pocket). It's not that it happens all the time... but it does happen. You need to make sure you are financially stable enough to absorb those types of things, plus if anything big breaks... like a $5,000 AC bill, or needing to replace a roof, etc.
It's not that I'm trying to paint a bleak picture... I just don't like to see a beginner think it's all going to be blue sky and butterflies and then run into what should be somewhat expected complications. We had a bad run on air conditioners last summer and had to replace 7 units in 2 months! That was $30-35,000 in maintenance we had to cover. Just starting out that won't be you - but $5,000 just starting out is big enough!
As you build a portfolio the nice thing is that the other units kick in to help cover / offset high expenses another unit might run into. But just starting out where you just have one or two is probably the most dangerous time as far as finances go if you aren't deep on cash. So I offer those cautions to you.
We do long term rentals. They are fairly stable, but will net less money than short term rentals as a whole. Out of 37 units we self-manage, we probably turn over 2-3 a year.
Otherwise, as far as loans go - I would say that very little cash flows well when financed at 7% interest rates. Too much of your money is going to the bank in the form of interest. With the high rates we are at right now, I would probably suggest a shorter term adjustable rate mortgage with the intent to refinance it down the line (presuming you think mortgage rates will eventually fall back down).
You have to find really good deals where you can net a descent cash flow to make it make sense to buy something. Don't buy something because it cash flows $100/month. Your money is way better off sitting in the bank earning 4% interest in a savings account in my opinion. It's just not worth the hassle of tenants and risk of potential expenses if you ask me. For us, our line in the sand on a financed property is that it has to make at least $300/month/door. So a duplex would be $600/month after principal, interest, taxes, insurance, and a maintenance reserve. As you do own properties longer, you do benefit from rent increases to help you make some more money, and there is always the option of refinancing higher interest mortgages down to lower ones at some point.
Hope some of it helps!
Randy
- 1yJason H.Pro MemberRental Property Investor · Pittsburgh | Chicago · Member since 2016 · 115 posts · 54 votes
@Randall Alan Very well said and I couldn't agree with you more! I invest extremely remote and went through years of poor management from three different PMs - finally gave up and self-managed from a distance, but the key was going through those previous years "paying tuition" and finally having enough experience getting to know people in the area and assembled my own team on the ground in the form of a local handyman and his wife who helps with showings, then a slew of various trades and technicians who can fix things that my handyman can't.
Your advice still holds true though, as my situation doesn't come to fruition overnight.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
@Victor Mejia many agents & contrators look to take advantage of OOS investors, so you want to screen them well and find trustworthy ones!
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.
If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.
We can also share numerous examples of properties & portfolios we’ve assisted investors with!
DM us if you’d like to discuss this logical approach in greater detail!
Logical Property Management4.9469 Reviews - 1yTodd AndersonPro MemberReal Estate Agent · Cape Coral, FL · Member since 2023 · 392 posts · 175 votes
Welcome to the BP community. Good for you for taking the first steps to start your REI journey.
@Randall Alan, makes many good points about investing 00S. It can be difficult to find cash flow if you were paying someone else for everything done on your property. I would suggest that you look into a tweak for this strategy. I have found that investing in new construction properties solves for many of these problems.
The growing build to rent model, allows investors to look 00S add a property that has been designed to be a rental. The investors I work with find that by new construction solves for the maintenance issues that can come with such a price for OOS investing. With this strategy, you are owning the property during the best years of its life, when it does not need capital improvements or much of the maintenance that older properties need.
Some of the builders that I have worked with, also solve for some of the other problems. Many investors find that builders will offer incentives to the investor that make finding cash flow easier. Some of these may include rate by downs and even free property management.
Please connect if you have more questions.
Best of luck
@Victor Mejia I recommend starting local if you can, just because you'll learn a ton by being hands-on. But buying out of state is also an option as long as it aligns with your investment goals. If you go the out-of-state route, be ready to lean hard on your local team (property manager, contractor, etc.). You won't be there to check on things, so having people you trust on the ground is everything. Also expect to spend extra time upfront researching the market, vetting your team, and making sure the numbers truly work after all expenses. For your second question, I recommend you look into HELOC. Hope this helps!
- Real Estate Agent · Washington, DC · Member since 2025 · 157 posts · 77 votes1y
Quote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
Start small then work your way out. I like to tell first timers to keep it 2-3 hour max commute on your first one. It's far enough away to get to it if something drastic happens or to check on the place. Less chance you'll need a PM which have fees so more money in your pocket. Let that build and then in the meantime get a lay of the area you want to invest in and repeat.
- 1yBernice RetzloffPro MemberMemphis, TN · Member since 2024 · 234 posts · 100 votes
Hey @Victor Mejia!
Great questions! And you're in a solid position with that $60K in equity to put to work. Buying out of state and holding long-term can definitely be a good move, especially if you're in a high-cost area where cash flow doesn't make sense. Markets like Memphis are popular for that reason! You can still pick up fully renovated, tenant-ready properties in the $100K–$150K range that cash flow well and are managed by local teams so it's hands-off. As for using your home equity, a HELOC (Home Equity Line of Credit) is often a great option. it gives you flexibility to use only what you need and keep interest low. Some investors also consider a cash-out refi, depending on your current rate and long-term plans. Happy to break down how others are using HELOCs to pick up cash-flowing rentals if you're curious!
- 1yKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Buying out-of-state and renting long-term can be a solid strategy if you choose the right market and have a plan to manage the property remotely. The biggest challenge is usually finding and trusting a good property manager. It’s also important to do your homework on local laws, rental demand, and neighborhood trends before jumping in.
As for using your $60k in home equity, your main options are a HELOC, a home equity loan, or a cash-out refinance. A HELOC gives you the flexibility to pull funds as needed, which is great for ongoing or multiple investments. A home equity loan gives you a lump sum with fixed payments. A cash-out refi lets you refinance your current mortgage and take out cash, which can be useful if interest rates work in your favor.
Kerlous Tadres | Reafco Real Estate542 Reviews - Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes1y
Everything you do remote is harder. Even the simplest things.
It's pretty easy for you to empty your dishwasher, but let's say you are on a trip in Florida and need someone else to go to your house and do it for you.
So you find a guy on taskrabbit, explain to them what you want, they drive over to your house, and start putting dishes away. Can you imagine in how many things this can go wrong? They go to the wrong house, they put items in places you'll never find them again, it takes them much longer, because they don't know where to put things, hopefully they lock the door on the way out and turn the lights off, then they charge you $120 because they had to drive across town and it took them 2 hours.
That's basically OOS investing.
- Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes1y
I used to be very against buying out of state with technology these days, I think it can work. You still want to visit and carefully analyze any area you invest in. And vet the operators/managers you work with (interview them, ask for references, etc.)
By far the biggest mistakes I see with out of state investors is buying in bad areas and hiring bad managers (and holding on to those managers for too long as well).
- Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes1y
Hi Victor! I started off as an out of state investor myself and it changed my life. I personally feel investing long term is the way to go. A lot of people think you can make money short term with real estate investing but it's hard if something goes wrong and kills your cash flow for the year. As long as you're holding on long term, I think it's amazing for many different reasons. I personally own 13 doors in Jacksonville and 1 in Augusta GA. We also have a real estate and property management company on both cities called Thirdstone Properties. Let me know if you are looking into either one and we can help :)
- 1yMelissa JusticeBusiness MemberRental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votes
Hey! Love this question and by the way, I’m originally from NJ too!
To your first point: yes, buying out-of-state rental property can be a great move, especially when you’re in a higher-cost market like NJ. A lot of first-time investors go this route to find better cash flow and landlord-friendly markets. I personally invest in turnkey rental properties, which are fully renovated, professionally managed homes in stable growth markets like in the Midwest and Southeast of the country. They’re ideal if you want a more passive investment and don’t plan to self-manage from a distance.
As for the $60K in home equity, you’ve got some solid options:
HELOC (Home Equity Line of Credit) – Gives you flexible access to funds and you only pay interest on what you use. Great for buying, renovating, or covering down payments.
Home Equity Loan – Fixed lump sum, better if you know exactly how much you need for your next property.
Cash-out Refinance – Typically used if you’re looking to restructure your current mortgage and pull equity out at the same time.
Feel free to reach out if you want to run numbers or explore markets that align with your goals—I’d be happy to help!Best,
Melissa
- Rental Property Investor · CA · Member since 2023 · 25 posts · 27 votes1y
Quote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
I bought a duplex last year in Columbus OH and without writing a long winded post I'm a bit old school. Let me know if you want to chat to go over the deets. I also bought in Arizona and live in California
- 1ySamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey Victor, when you using Helocs I would focus on only getting short term loans for value-add deals so you don't lock your homes equity in another long-term form of debt.
With your budget you'd probably need to look in markets OOS that have lower price points.
Doing BRRRRs or flips out of state definitely adds another level of difficulty, but it can be done very successfully.
You'll want to work with a good agent so you can gain the right understanding of the market you're in and pull accurate comps while also getting access to exclusive deals and pull the comps. Then you'll need to find a high-quality contractor who can ensure your rehab is done properly.
I recommend doing BRRRRs in cities that have some sort of mix between appreciation and cash-flow!
Reafco - Samuel Diouf528 Reviews - 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
@Victor Mejia Out-of-state long-term rental investing can be a smart move if your local market is too expensive or low-yielding. Just be sure to research landlord-friendly markets and build a strong local team (agent, contractor, property manager). It offers better cash flow and diversification, but comes with less control and higher reliance on others.
To access your $60K in home equity, consider a HELOC for flexible, interest-only borrowing as needed (ideal for down payments or repairs), or a home equity loan for a lump sum with fixed payments and rate (better for one-time costs). Choose based on whether you need flexibility or fixed terms, and ensure rental income covers any added debt comfortably.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
INVESTOR FRIENDLY CPA®4.9242 Reviews - Property Manager · NJ · Member since 2017 · 786 posts · 396 votes1y
@Victor Mejia my simple advice. if you're not an LP or part of a JV deal, don't invest out of state at least not yet. NJ is a huge state and there are deals to be had here. They are harder to find but if you stay "local" you can get the reps and skills you need to establish the systems required to be an out of town investor.
Even if you don't self manage here, working with a property manager is a skill and a part of the business you need to learn, its a lot harder to do so from a great distance. Also a property manager on a small property will eat away at too much of your profits to make sense and your deal will be too small for him to prioritize it so what ends up happening is your property gets neglected
Put together your investing criteria, and strategy create a buy box and find out what area those types of deals work in. Remember to learn how to buy so that you can be profitable from day 1. Lastly dont buy based on a budget, figure out how to get leverage and terms so that you can buy a deal that makes money and is worth your while
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
Hey Victor, welcome to BP! Great questions — and you're definitely not alone in looking out of state for better returns, especially with how pricey many local markets have gotten. Buying out of state and holding long-term rentals can absolutely be a good idea, as long as you're strategic about the market and build a solid local team (agent, property manager, contractors, etc.). I actually moved from Portland to Columbus, Ohio in 2020 to start investing and now own 10+ rentals here. Columbus is one of the markets where out-of-state investing really works — it’s landlord-friendly, still affordable (you can find properties in the $130K–$180K range that cash flow and hit the 1% rule), and there’s strong job and population growth with major companies like Intel, Google, Amazon, and Honda expanding here.
As for using your $60K in home equity, the two most common routes are a HELOC (Home Equity Line of Credit) or a cash-out refinance. A HELOC gives you flexibility — it works more like a credit card with interest-only payments during the draw period, and it's great for short-term funding like down payments, rehab costs, or a BRRRR strategy. A cash-out refi replaces your current mortgage with a new one and gives you a lump sum — usually better if you want to lock in a lower rate and use the funds all at once. It really comes down to your comfort level with monthly payments, risk tolerance, and how you plan to use the money. Happy to connect and answer any questions you have — you're off to a great start!
Jimmy Lieu, Red 1 Realty4.9122 Reviews - 1yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Victor Mejia:
Hey! So i have a 2 part question. First time investor in real estate and i wanted to get insight in buying property out of state and renting long term. Is this a good idea. Second, I have 60k in home equity that i want to use, what type of loans would be best to use my home equity? Thanks in advance
Many people I know buy rental properties out of state. It's a good idea, but you need to do it carefully.
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