Investing out of state has been a great option when you can’t afford to invest in your market. Here are the key components you need to find before you start. Depending on your real estate skills and what you’re comfortable doing the order of the list can change.
Determining the market you invest in is the first step to investing out of state. Some key factors to look at when determining the market you want to invest in are;
Are people moving in or out of the market you’re researching.
Who are the top employers in the market you’re researching and are quality employment opportunities increasing or decreasing?
Does the market you’re researching have a state income tax and if it does, what is it? What is the property tax in the market you’re researching? Is the market you’re researching real estate friendly? Will it be difficult to evict potential tenants or get city permits if you wanted to renovate a potential deal?
Location will always be king in every market, but will you get the return on your investment that you’re looking for in that specific market? Does the market you’re looking at have a high crime rate?
Finding an investor friendly agent is the next important step. An investor friendly agent will understand the metrics that make a great investment. They will also have recommendations for who to contact as the process continues.
Finding a good deal is useless if you can’t get financing. There are many strategies to financing an investment deal; Conventional, Hard-Money, Private-Money, or using current equity in the form of a cash-out refinance or Home Equity Line of Credit (HELOC). Determining how you’re going to finance it is the next important step to getting an out of state investment.
Finding the right property manager is extremely important. It can mean the difference between a positive cash flow month and a years-worth of profit gone. An investor friendly agent should have multiple recommendations. While this is listed last on the list, it shouldn’t be ignored or taken lightly. Vet multiple candidates before making your decision.
If you’re thinking of investing out of state and want a second opinion during the process send me a message and I’d be happy to take a look at your deal or assist you with the process.