Some real estate investors are intimidated by the idea of investing in properties out of state. There’s really no reason for that. It’s very possible to invest in commercial or residential properties that are located in other states. In fact, many highly successful real estate moguls are invested heavily in properties in other states and even countries. There are several ways to get started in out-of-state real estate investments.
One of the easiest ways to get started in out-of-state investment properties is by wholesaling. People who wholesale are not playing the long game. Wholesalers are people who scout out properties that are selling for big discounts. That can mean foreclosures or similarly difficult situations. The wholesaler gets the property under contract and then passes it on to someone else. The end buyer is the one who handles all the labor-intensive aspects of a flip and so on. The wholesaler is more or less a middleman, and is basically working for the equivalent of a finder’s fee.
A more traditional kind of real estate investment is just to flat-out own properties and collect rents from tenants. It’s very possible to do this from out of state. In fact, this is a common thing in some areas like the tri-state New York, New Jersey and Connecticut area. In some situations over greater distances, though, it can be significantly more labor intensive than doing the same thing while in state. The challenge with rental properties is always the management of them. Depending on the location, it can be difficult to screen and find good tenants. When the owner is out of state, it’s also necessary to find a trustworthy property manager.
Finding a reliable property manager who works for a reasonable fee is another hurdle, but one that’s very manageable. Remember however, this person will be overseeing a sizable investment so do your homework on their reputation. Rental properties in another state can be a good source of passive income. Even with a good manager, it’s important to find a way to keep an eye on these properties from a distance. These days, with tools like Skype, it’s easy to communicate with property managers. It’s still advisable to put in an appearance once a year or so at the very least.