Tips for Investing Out of State

TipsWhen thinking about investing in real estate we tend to think of properties only in our immediate surroundings. Property in California is expensive to get into so, we think I guess I will just rely on my pension (good luck with that, right!?) and/or some horrible 503b some sales guy talked us into. With that mindset, we give up on the profitability rental properties can provide for our short and long term financial freedom. We can find this profitability out of state. There are several great spots across the country. I like parts of Texas, and parts of Georgia and Arkansas, but recently I have targeted Jacksonville Florida. Jacksonville is the opposite of places like Miami, Los Angeles, and other large cities. It’s laid back, not flashy, yet full of jobs and lifestyle possibilities. You can jump into the warm Atlantic waters that surround Jacksonville for under 100K. Most of us can’t leave our lives, and probably wrongly attempt to force ourselves to become Jaguar fans, but we can invest there. Like other great places to invest, Jacksonville has the key markers for solid real estate investing. It’s affordable (30K-50K for a solid investment property), which is attractive for most of us. But, cheap property doesn't mean getting a good deal. You need to have an approach. How do you begin buying out of state property? Until you have a relationship of trust with an agent, you need to do your own due diligence. That means flying out, meeting with the person or company, interviewing the management company, and possibly meeting a back up agent or investment firm. You can buy homes of f the internet sight unseen and many people do, with success. I would never recommend that. Several years ago I was looking to buy some student rentals in Utah. I did area research, studied rental rates, and did everything I could do online. Then, booked a flight and spent two days with a real estate agent, one that I had built a relationship with online and over the phone, and I bought a rental unit. A year later I was ready to buy another property. This time I felt comfortable doing the deal over the phone and over the internet. I’m not saying there’s no risk in buying sight unseen, but by this point the agent understood the type of property I was looking for, and was willing to take extra video and pictures of the property. I still own that property, and it is still a great rental for us. But, before you get to the step of buying, whether you fly out or you don’t, you need to understand the area you’re thinking investing in. You don’t want to simply invest in a market because you can afford a home there. Or, some guy in a blog post says it's a good idea. You need to become a virtual expert of that area. You may want to check local publications, city-data.com, the Chamber of Commerce site, and Google places to visit, to see if this is a growing and flourishing area. You definitely want to walk away from an area that has no urban sprawl, and/or no upward moving job market. Are companies moving in, or moving out? Check business news, personal websites and local blogs (which tend to give you an honest personal outlook of an area). Find some area Facebook pages, and start asking questions. An important note here: when you find things about an area you don’t like, that don’t fit what a good investment area should be—don’t rationalize those negative aspects away just because you have an emotional connection with that city. Sometimes you just need to walk away. You also want to have a pretty good idea of what’s happening in that housing market. Don’t assume it mirrors the market you live in. One test of the agent you’re working with is whether or not they can give you some of that market data. How long are homes staying on the market? Has there been a upswing in foreclosures? And, probably more importantly what is the cost of living in relation to home prices. You will also want that agent to be able to generate the data important to buying a cash flow property. Your focus, and theirs, needs to be more on return than it is on price. Getting a low price means nothing if you’re not getting the return you want. The agent needs to show an interest in your goals. Are they concerned whether you’re a long term investor, or a short term investor? If you’re interested in Jacksonville, and you want to work with a property management company, and an investment team that I’ve vetted, get on our email list. Join our inventory email list, and receive periodically updated cash flow properties, including pictures and appraised value data. We also want to help with your CA real estate needs. Bookmark our website for Investing Out of State--

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