Updated about 2 hours ago on . Most recent reply
Advice on renting out of state properties
Hi everyone!
I was wondering if I could get some guidance or pointers here. My father and I are looking to get into a venture in real estate, and have been looking at buying and renting properties out of state. We live in California and prices here are a bit too much to comfortably take the risk. We are looking at states like Ohio and Illinois and planning to either do section 8 rentals or just general renting. Is section 8 still a viable option, and if so, what should I be aware of? Other than the fact that you're taking a risk with renters if you don't do your due diligence.
The numbers add up, the property we are looking at is 70k, and would take a 25% down payment of 17.5k. It's 3 bed and 1.5 bath and is fully renovated. The loan may be about 733 a month, and we can hopefully expect a rent of ~1400 a month from section 8. Assuming a property manager charges us 10% of that, that brings us to a total monthly cost of ~900 a month given small repairs and such.
The numbers feel good, but I'm just afraid they feel too good to be true. Has anyone here entered this type of market and can provide some wisdom and knowledge for us? I would greatly appreciate it!
Most Popular Reply
#2 All Forums Contributor
- Rental Property Investor
- Phoenix, AZ
- 861
- Votes |
- 413
- Posts
#2 All Forums Contributor
- Rental Property Investor
- Phoenix, AZ
Great question and welcome to the journey of building wealth through real estate! It sounds like you’ve already done some solid homework running the numbers, and you’re asking the right questions before diving in.
A few thoughts from experience:
1. Section 8 is still very viable. In fact, in many Midwest markets like Ohio and Illinois, Section 8 demand is strong because it provides guaranteed rent direct from the housing authority. The key is to screen tenants thoroughly just as you would with a non–Section 8 renter - the voucher guarantees payment, but not tenant quality. Your property manager will be critical here.
2. Your numbers look realistic. A $70K fully renovated property renting for ~$1,400 is right in line with some Midwest markets. The cash flow spread after mortgage, property management, and reserves is exactly what most out-of-state investors aim for. Just make sure to run conservative estimates - factor in at least 3-5% for vacancy and 3-5% for maintenance, even on a renovated home.
3. Due diligence is everything. The “too good to be true” feeling often comes from skipping steps. To protect yourself:
Get an independent inspection (don’t rely only on the seller’s “fully renovated” statement).
Have your property manager walk the property before closing.
Verify the rent with actual local comps, not just what the seller projects.
4. Consider the bigger picture. Section 8 can be great, but it’s not the only path. Many investors balance their portfolio with a mix of regular tenants and Section 8 for stability and flexibility.
5. Leverage Turnkey Options. Since you’re out of state, you may want to look at turnkey rentals in the Midwest and Southeast (think Ohio, Alabama, Tennessee, Mississippi, and Georgia. These come fully renovated with property management in place, designed for investors just like you. That way, you can focus on scaling without being in the weeds.
Your deal doesn’t sound too good to be true - it sounds like you’re on the right track, you just need to layer in strong due diligence and the right team. With the right systems, this can absolutely work and even be the foundation for scaling into more doors.
Always happy to chat more about specific markets or run deal scenarios side by side. Let me know!
Best of luck!
- Melissa Justice
- [email protected]
- 313-221-8718
