Often times as a person is interested in real estate investing for the first time, they look at single family houses as the way to go. Can you blame them? Think about it. Owning a building - something you couldn't even imagine until now. It's an accomplishment. But is it the best way to enter the market as a new investor? This isn't just the case for houses, but mobile homes as well.
When you do begin looking for rentals, there may not be much for supply in your local market so you expand your search. Your search may include rentals out of state, or even within the same state but far away on the other side of it. What you don't know during your excitement can hurt you financially and cause stress on you and your family.
Property Management Obstacles
You may think, "Oh, I will just have the tenant mow the grass and shovel the snow", but this doesn't always happen. Tenants can get lazy or let things slide. Sometimes life happens and they just don't have the time. When they do fail with maintenance upkeep, grass and weeds can grow beyond what code enforcement allows and can run up a tab in citations for you to pony up.
In the event of a furnace or plumbing emergency at 3 am, you will receive frantic calls from your tenant(s) demanding instant gratification. When something like this happens, you will often find yourself on the phone in front of Google scouring the internet for an emergency professional willing to make the house-call this early in the morning.
"But I will just hire a management company to deal with this", you say?
It's not always that simple. With single-family properties, there is rarely enough of a spread between the rent and expenses to pay a management company and still make the investment worth your time.
Don't let us scare you into running away from real estate investment. It's still a great vehicle to wealth when done properly. The key is knowing when to go in full speed, and when to run away as fast as you can. Only you know your limitations and capabilities.
What benefits are there to owning out of state or long distance rental properties?
It can be tough finding good deals locally depending on where you are personally located. The market could be saturated with willing buyers ready to throw money at a seller. When that's the case, looking out of your area is a seductive prospect.
Another issue you may have as a long distance purchaser may be the cost of buying homes near you. Let's be honest. Some of these prices are absolutely ridiculous! In this case, you will certainly find better deals further away. You may be shopping in a rural area, or even in a state that is known for low cost housing. As an example, a million dollar home in Los Angeles may be $100,000 in another state. You may have even found better terms with sellers willing to accept owner financing for your acquisition.
There are plenty of reasons to buy out of state homes. The real test comes when you find out that managing them is tougher than you realized. The potential for squatting with squatter rights, or possible theft and vandalism due to a property being temporarily vacant while shopping for tenants is very real.
What can be done about an out of state home?
The home may be able to be sold on the retail market. Sure, you can try your go with a real estate agent. Depending on the market however, the home may sit for awhile. Think about how long the property was on the market before you secured it for your portfolio. Also consider how the market may have changed during a recession or other limiting factors. What about the value? Has it dropped or risen? Does it have the potential to drop even further, costing you equity if you wait for a retail sale?
Another option is to go for sale by owner. Give it your best shot and see how great you are at marketing. It may be a hot deal, but it can potentially be a hard to sell property as well.
As home buyers, we would like to extend our hand and make an offer on your property regardless of its condition. Do you have a single family home? Multi-family property? Mobile home with land, in a park, or one that needs to be moved? Our company is interested in having the opportunity to free you from your out of state investment that you no longer want or need.
Give us a call at 888-519-3721 or request an offer with zero obligation to you. Let us buy your out of state rental.