New to Investing Long Distance
Matthew Kai ElliottPro Member
Weiser, ID · Member since 2021 · 2 posts · 10 votesNew to Investing Long Distance
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Alfath AhmedBusiness Member
Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votesQuote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
That's awesome that you and your husband are thinking ahead @Matthew Kai Elliott. STR's are a great method to do that or another way is being a full time realtor/investor.
I've sold a ton of STR's to OOS clients buying near osu campus here in Columbus. They profit well because football season at ohio state is huge and there is so much business growth that downtown and short north are always popping.
Affordable and solid assets that hold value. You should look into it.
ReafCo | Ahmed Group 536 Reviews
14 Replies
- 2moKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
The midwest of course!
- 2moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
I'd focus less on the exact state and more on picking a landlord-friendly market where a cost segregation study can generate real depreciation. I'd recommend starting with one long-term rental in a market with a property manager and boots on the ground you trust.
Kerlous Tadres | Reafco Real Estate540 Reviews - 2moEvan HoppleBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
It isn't too often that I come across someone who's in a position to fully benefit from the REPS tax strategy, but it sounds like a great fit for your situation.If you're investing out of state, I'd spend more time choosing the market than the property. Look for year-round demand, STR-friendly regulations, and a strong local team. Those factors will have a much bigger impact than finding the "perfect" deal.
I'm based in Ohio, and Hocking Hills is one market that's attracted a lot of STR investors because of its consistent tourism and established vacation rental market. Every state has markets like that. I'd identify a handful, compare the numbers and regulations, then let the deals come from there.
Reafco Real Estate - 2moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 937 votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
You're already ahead of the curve with a few rentals under your belt. The biggest shift with out-of-state investing is choosing the right market and, even more importantly, building a team you can trust. Don't just chase the highest returns, look for markets with solid fundamentals, landlord-friendly policies, and reliable local partners. Midwest markets are worth considering because they can offer lower entry prices, strong cash flow, and plenty of opportunities to scale with the right boots-on-the-ground team.
- 2moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesWelcome to BP! Since you're already investing successfully, I'd start by narrowing your search to one out-of-state market instead of trying to learn several at once. Underwrite a lot of deals, connect with a few local investors and property managers, and make a short visit before buying if you can. Having a solid local team is just as important as finding the right property. Since you mentioned Idaho has been tough to find deals in, Columbus is definitely worth a look. I actually moved here from Portland in 2020 and now own 10+ rentals here because the numbers made more sense. There are still areas where you can find buy-and-hold properties in the $120k-$180k range that come close to or exceed the 1% rule, plus the market has strong job and population growth with companies like Intel, Google, Amazon, Microsoft, Honda, LG, Nationwide, and Anduril continuing to invest in Central Ohio. That combination has made cash flow and long-term appreciation work well for a lot of investors. Happy to connect and answer any questions you have!
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 2moSean O'KeefePro MemberCPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
Great advice from @Evan Hopple and @Jimmy Lieu on market selection, and @Kerlous Tadres is right to bring up cost seg since that's where a lot of the depreciation benefit actually comes from. One thing nobody's mentioned yet: even if you qualify for REPS, you still need to materially participate in each rental activity to actually use those losses against your husband's W2 income, REPS alone doesn't get you there. A grouping election under 469(c)(7)(A) can help if spreading your hours across STRs in Idaho, LTRs in two states, and a new out of state deal makes material participation hard to hit on every property individually. Worth thinking through before you close on anything new, not after.
There's also a wrinkle specific to your STRs that's worth understanding. REPS under 469(c)(7) needs 750+ hours and more than half your work time in real property trades or businesses like rental, management, or development. But if your STRs average a 7 day guest stay or less (or 30 days or less with substantial services), the regs don't even treat that as a rental activity, it's closer to running a hotel. That's actually what makes the STR loophole work in the first place, you sidestep the passive activity limits through material participation instead of needing REPS at all. The catch is those STR hours generally don't count toward your REPS test either since they're not classified as rental real estate, though some argue hands on operational hours still qualify and that's genuinely a gray area. You likely don't need REPS for the STR side, just solid material participation in the STRs themselves, and REPS is really doing its work on the LTRs, provided you meet the REPS test on hours without the STR hours.
Happy to Connect!
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice. - 2moDivin KanyamaBusiness MemberAccountant · Seattle, WA · Member since 2025 · 351 posts · 131 votes
I'd start by separating the tax strategy from the investment strategy. REPS can be valuable, but make sure the 750-hour/material participation requirements are real, documented, and reviewed with a CPA/ Tax Adviser who understands STRs and LTRs.
For out-of-state investing, focus on markets where the deal works on its own: strong job/population growth, reasonable landlord laws, reliable property management, and conservative cash flow after taxes, insurance, repairs, vacancy, and travel.
Before buying, build the team first: CPA, lender, investor-friendly agent, property manager, insurance broker, and contractor. I’d also compare expanding near your existing Idaho/Washington footprint versus entering a totally new market.
Bottom line: don’t stretch just for deductions. Only buy if the deal stands on its own cash flow and long-term fundamentals; the tax benefit should be the bonus, not the reason it works.
- 2moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
Find a good Realtor, PM, contractor, and lender in the state you are looking at
- 2moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 333 votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
Welcome to BiggerPockets! Since you already own a mix of STRs and LTRs, it sounds like you've got a solid foundation. If you're looking to scale while finding better cash-flow opportunities, I'd start by researching markets where your dollars go further. One market I'd recommend taking a serious look at is Memphis. There are still opportunities to purchase quality single-family rentals under $150K, and depending on the neighborhood and condition, many can still meet or exceed the 1% rule while also benefiting from appreciation over time if you buy in the right locations. If you're considering the BRRRR strategy, another advantage is that local hard money lenders can finance 100% of the purchase and 100% of the rehab, with draw requests throughout the renovation so you don't have to front the rehab costs yourself. Many investors are able to complete deals with around $10,000 out of pocket before refinancing into long-term financing. Before investing out of state, I'd spend time learning ARVs, rents, market trends, and the overall layout of the city so you understand exactly what you're buying. Just as important is building a strong boots-on-the-ground team consisting of an investor-friendly agent who also owns rentals, a solid property manager, a reliable general contractor, and the right hard money and DSCR lending contacts. Having the right team in place is what allows many out-of-state investors to scale confidently while minimizing risk. Feel free to reach out, talk soon!
Jordan Ray - eXp Realty5112 Reviews - 2moJason MalabuteBusiness MemberAccountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 902 votes
One thing worth thinking through before you buy anything new: qualifying for REPS by itself doesn't automatically let you use rental losses against your husband's W-2 income, you still have to materially participate in the rental activity too. With STRs in Idaho, LTRs in two states, and possibly a new out-of-state property, hitting material participation on each one separately can get tough, so a grouping election to treat all your rentals as a single activity is worth looking at. There's also a wrinkle on the STR side: if your short-term rentals average a guest stay of seven days or less, the passive activity rules don't even treat them as "rental" activities, which means you can make those losses non-passive just by materially participating, without needing REPS at all. So REPS is really doing its heavy lifting on your long-term rentals, while the STRs can work on material participation alone. Exactly how this plays out depends on your hours and your specific facts, so I'd map it out with your own CPA before closing on the next deal.
Malabute & Company CPAs525 Reviews - 2moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
That's awesome that you and your husband are thinking ahead @Matthew Kai Elliott. STR's are a great method to do that or another way is being a full time realtor/investor.
I've sold a ton of STR's to OOS clients buying near osu campus here in Columbus. They profit well because football season at ohio state is huge and there is so much business growth that downtown and short north are always popping.
Affordable and solid assets that hold value. You should look into it.
ReafCo | Ahmed Group 536 Reviews - 2moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Matthew Kai Elliott:
My husband is a high income W2 employee. I am a homemaker but looking to hit my 750 hour REPS status this year. We live in Idaho and currently own 2 STRs in Idaho, 1 LTR in Idaho, and another LTR in Washington (which we purchased when we lived there). We love investing and use it as a means to lower our tax burden but it is hard to find deals in Idaho. We are thinking about stretching and doing something out of state. Anyone have advice of where to begin?
I'd be VERY careful investing OOS.
You've succeeded in WA because you used to live there.
So, you know the area and probably have rental-supporting connections there.You live in ID and your rentals are probably close by.
So, again, you know the area and have rental-supporting connections.How are you planning to learn an OOS area and build rental-supporting connections there?
Also, if you hire a PMC, it will be VERY difficult to claim any time invested towards your REPS status.
It may be better to double down on your efforts to find another local rental.
One of the biggest mistakes we see investors making is thinking they have to offer asking price - or anything near it.
30+ years ago, had an experienced investor tell me that to be successful, I'd need to look at 100 properties, make offers on 10, to HOPEFULLY have a seller accept 1.
That implies a lot of work, but successfully investing is WORK.
Lastly, what Property Class are your current rentals?
I'm going to guess they are all Class A.Not easy to find cashflowing Class A rentals, even STR ones, these days.
STR does typically imply Class A, but LTR you may want to target Class B.
If you invest OOS, you'll get sold mostly Class C LTR.
Is that really what you want?
Logical Property Management4.9459 Reviews - 2moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Moving out of state is a great way to scale when local yields tighten, but since securing REPS to offset your husband's W-2 income is a core goal, you have to approach market selection with material participation in mind. If you buy out of state and hand everything over to a full-service property manager, the IRS can easily challenge your hours.
Remember, STR and LTR hours don't combine for REPS hours. They are separately tracked.
To keep those 750 hours defensible, you'll want to either self-manage remotely, handling tenant screening, maintenance dispatch, and guest communications yourself, or focus on value-add projects where you log substantial hours managing contractors and renovations. For long-term rentals that actually pencil out, landlord-friendly markets in the Midwest (like Indianapolis or Columbus) or the Southeast (like Greenville or Winston-Salem) offer strong rent-to-price ratios. If you prefer short-term rentals, drive-to vacation hubs in the Southeast with mature tourism and predictable regulations are great places to look.
A solid place to start right now is picking just one target market and building your local team, an investor-focused agent, a reliable contractor, and cleaners, while logging every minute you spend on market research and underwriting, as those early setup hours count toward your REPS threshold. Make sure you're coordinating with a real estate CPA on how you'll aggregate these out-of-state properties under Section 469(c)(7) so your participation math stays bulletproof. Best of luck!
INVESTOR FRIENDLY CPA®5241 Reviews - 2moJames WachobBusiness MemberReal Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 890 votes
Hey @Matthew Kai Elliott! Congratulations on already building a solid portfolio! With multiple STRs and LTRs, you're in a great position to expand out of state. The biggest adjustment is usually shifting from being market experts where you live to relying on a trusted local team elsewhere.
If your primary goals are tax advantages and long-term portfolio growth, I'd start by identifying two or three markets that align with your strategy, then spend time building relationships with investor-friendly agents, lenders, property managers, and contractors before looking at specific properties. Having the right team in place will make the transition much smoother.
I'm a real estate agent based in Memphis and work with out-of-state investors building rental portfolios. Many of our clients come from high-cost or low-inventory markets because they're looking for stronger cash flow, affordable entry points, and consistent rental demand. Memphis has been a great fit for many of those investors, especially those focused on long-term rentals and scaling a portfolio.
Since you already have experience managing different property types, I think you'll find the biggest challenge isn't investing out of state. It's choosing the right market and building the right team. If you'd ever like to compare markets or learn more about investing in Memphis, I'd be happy to connect and help however I can.
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