Is Investing in Real Estate in Other States a Good Idea?


A question that has been coming up a lot lately is, “Should I Invest in real estate in other states?” This is actually a great idea for those people that are living in overpriced markets where cash-flow is virtually non-existent, but there is a price you’ll pay for going out of state.

Investing in properties that you can’t simply hop in the car and drive to, requires a steady plan and an impeccable team. If you don’t have a solid management company, your experience could turn into a nightmare. I recommend to anyone considering investing in properties out of state to also make sure that you have a trusted friend or family member within reach of your property. Unless you can personally oversee your manager remotely somehow, it is a good idea to check up on your properties and management periodically. While I learned this the hard way, you don’t need to. You can use your tenants to keep you posted on the effectiveness of your management company, and your building’s neighbors to let you know about your tenants. Having someone you trust around, though, can give the peace of mind you will want with a property located far away.

These lessons, which I learned the heard way, should make life a bit less stressful for the rest of you who want to buy a property far away.

Overall, investing in other states can be very profitable, but there are costs. Having an investment property in a place that you can easy access makes life that much easier on you.

The best place to find good investments is typically in your own backyard. Given the current market conditions, now is as good a time as ever, to find deals where you live. With the massive influx of foreclosures and properties that owners can’t keep up on their payments on, bargain hunters can snap up great income properties virtually anywhere in the country if they have the skills to find them.

BiggerPockets has helped thousands of investors learn how to do this (for free, of course)! To start learning yourself, just jump on to our real estate investing forums.

About Author

Joshua Dorkin

Joshua Dorkin (@jrdorkin, Google+) founded when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 600,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.


  1. Every state has different laws regarding real estate. It is important to contact a local real estate attorney in the area of prospective purchase and have a discussion of the differences in basic real estate law, taxes, typical property rights and problems, and tenant/debtor rights. Absentee landlords are often slow to respond to issues, so employing competent management is important.

  2. I’m listening to an audio book right now discussing this very idea in one of its chapters. I agree with you and so does that book that it can be profitable, but doesn’t make a lot of sense. Seems best to invest in an area that you know very, very well – like your own backyard.

  3. In fact, most people aren’t willing to take the risk that real-estate investing entails; fortunately, these are the same people that will make you rich by renting from you. The little secret is that there are hundreds of individuals who procrastinate for every one individual who has a vision and chooses to take the risk.

  4. I think you have to find a good management company if you’re going to buy property out of state, or, as you said, have friends or family in the area who can check up on the property and the management company from time to time. The key is knowing the area you’re buying in. A lot of people put themselves in tough situations that got into the real estate bubble late in the game from buying out of state, in places like Las Vegas, and then with risky loans that were based on property values increasing.

    There are companies, like, that enable investors to buy property out of state and handle all of the management concerns for the property. They do research and build in locations where long term growth is good – states like Idaho, Arizona, Texas, Washington…

  5. I am an investor that lives in California and Italy. I have found Texas to be a great place for single family investments. I have bought a few properties through Blake Venture Corp. They specialize in selling investment properties.

    I think it is great to invest in different markets but it is important to have a good management company. I also owned some rental property in Arizona but ended up losing money because the property manager was terrible. My house sat vacant for 4 months. As soon as I switched companies, the house was leased in 2 weeks.

  6. Seems like the management is key. Not being able to personally oversee the details gives me a bit of a fright. I like to be sure everything is working well. What techniques or successes have you had in hiring good management?

  7. I think this really comes down to a question of how large your portfolio is and what type of management team you have in place. For someone with a few properties it might be disastrous to have a few spots that are further then driving distance. It might just be a matter of practicality and common sense. I guess it just ain’t that common though, is it?

  8. I agree 100%, it all about getting a great management team that will make sure you have good tenants that not pay but keep the property up as well. I think if you buying out of state you really to be in it for the long haul.

  9. This is such an interesting topic. I agree that the most sensible technique is to stay in your ‘backyard’; however, when your backyard is overpriced such that getting into an investment carries with it incredible risk with marginal upside, it may be time to look at out of state investments.

    My business partner and I live in Memphis, Tennessee – considered one of the top places to invest in the US today. I will tell you, we sold almost 30 investment properties last month, almost exclusively to out of state clients. Now these people are having success with these investments, but it is because we have a team in place that allows them to sleep at night and sets them up for success. This is ESPECIALLLY important with property management!!!

    I guess the point is, profitability does exist in out of state investment homes; you need the support infrastructure to make it work, and DO YOUR HOMEWORK!

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