Pros, Cons Of Buying REI In Hometown V. Out-of-state?

Comments(9)

• 
  del1730th August, 2004

  Here's my opinion:
  
  Pros:
  Out of state propeties cost much less which means positive cash flow.
  
  Cons:
  1> Since you're far away, you have to hire a Property Mgr. and they usually charge 10% of the monthly rent.
  2> If something goes wrong, you need to travel to your out of state property.
  
  But other than that, everything should be okay.

• 
  OverAnalyzer31st August, 2004

  Hi, I will probably move to DC, MD area, but I am really worried that I might not be able to afford to buy properties there anymore due to the high cost. Could you tell me what the market is like there? Can you get positive cash flow for rentals? i guess people don't do lease option coz the appreciatio is so great, right?

• 
  InActive_Account31st August, 2004

  I live in So. CA near LA.
  
  I am looking into REI out-of-state as well maybe small apartment, SFH etc.
  
  For some of you experienced out-of-state investors, what cities can provide affordability and cashflow, plus good appreciation, that are friendly to investors? Your advise is greatly appreciated.
  
  James :-?

• 
  del1731st August, 2004

  To James:
  
  I too am from CA, check out the state of Arizona. SFH are between $100k - $200k and are newer. I was told that the greater Phoenix area is booming.

• 
  InActive_Account1st September, 2004

  Del17,
  
  Thanks. I have heard many times about Phoenix but I haven't been there yet.
  
  Also TX(Austin), Vegas(kind of high right now). I want to look at OR also.
  
  I like to hear from current investors in AZ, TX, OR.. any advise/ recommendations of areas and what to look for will be greatly appreciated.

• 
  OnTheWater1st September, 2004

  Hello,
  
  Pros: Today is Sept. 1st. I have half of our rents collected. Tomorrow we'll get the rest. we live literally ten minutes from our properties.
  
  Cons: My dad collects our rent from our out of state properties. He lives literally ten minutes from all of them.
  
  Cons: I cannot be there to have a presence in the neighborhood.
  
  Cons: Property management. Will they take as good of care as you would of your properties? How do you know?
  
  Cons: I look at out of state owner's properties when I buy. Some have no idea just how bad there properties are.
  
  I just like to be around mine unless my dad is around them.
  
  I guess it comes down to how comfortable you'll be with out-of-town property ownership.
  
  Thanks,
  
  OTW :-D

• 
  ew861st September, 2004

  I live in AZ and have properties in Phx, Austin and Tampa.
  
  Phx: Appreciation is great. Vacancy rate is not too good. Other expenses such as property tax, insurance are good. In other words, if you invest in Phx, check vacancy rate and have plenty cash reserve.
  
  Austin, Tx: Vacancy is great. Appreciation not as good as Phx. Property tax and insurance are much higher than Phx.
  
  Offcourse, above mentioned factors depend on the location that you've chosen.

• 
  Kokomo1st September, 2004

  This is a message in reply to OverAnalyzer's question.,which is a bit off topics. If you want to continue the discussion, we should start a separate thread.
  
  I live in DC suburb in MD. All I do is rental. Even with the recent appreciation we have, one can still get positive cash flow for rental. There are pro and con in each type of market condition. There are two keys: (1) Buy it low enough, and (2) getting the right kind of loan. Conventional 30 yr fixed rate mortgage most likely won't do it.

• 
  NHRalph2nd September, 2004

  I used to own a few condos in Florida. They were a lot cheaper then up here and the rents were comparable. I had no problems at all but I had someone down there to look after things.