I can better afford to invest in real estate away from my hometown. I live in New Orleans and for various reasons want to invest outside of my area. Is it realistic to think about purchasing a rental home 5 hours away?
2007-07-09 03:42:02 · 13 answers · asked by andrew 1 in Business & Finance ➔ Renting & Real Estate
It just depends on the property. If it will require a lot of maintenance and upkeep this will more than likely not be a good investment. If problems arise often you will be the one to have to make the 5 hour drive to the property. Even though you have tenants it is your responsibility when somethings breaks to fix it or have it fixed.
2007-07-09 03:46:57 · answer #1 · answered by dolphin2253 5 · 0⤊ 0⤋
I see a lot of people talking about the headache of going to check on the property, but I'd be more concerned about the acquisition. Buying in the same areas (especially for investment purposes) means that you get to know the comparable sales, the ARV (After Repair Value), and what constitutes a good 'deal'.
Buying so far from home only means that you have no way of knowing what the appreciation rate for the area is, if it's regentrifying or not, and whether or not rent rates will support the payment you make to the mortgage company each month. That is to say, if your mortgage payment is $1000 and rental payments in the area are $800 a month, you're probably going to lose $200 per month (a negative cash flow situation) AND it might even stand vacant longer while you look for someone willing to pay the top-end of the rental market.
Your best bet is to wholesale properties in your area of New Orleans (aka selling them to another investor or an owner/occupant) which would require less financial risk and you often hold the property for less than 2 months, if that.
Find your local real estate investors club (also called a REIA) by looking online. They'll have properties to buy and sell, as well as a whole HOST of great information for a new investor.
2007-07-09 07:07:00 · answer #2 · answered by bigchezmktg 1 · 0⤊ 0⤋
I have done this, even had rental properties out of state. It can be great investments for you to have properties. Just make sure that you have a property manager. If there is a problem with the property, and the tenant calls, you don't want to have to do a ten hour round trip to take care of it 2-3 times a month.
Just realize the property manager will cost 5-10% of rent so when buying a rental, put those costs into the buying decision to make sure the situation works fo you. Also, start looking for a property manager before you buy a house. Interview several and check references. They can be a world of great information about what neighborhoods and type of houses are the best rentals for their market.
Good luck!
2007-07-09 04:06:26 · answer #3 · answered by rlloydevans 4 · 0⤊ 0⤋
too a lot of of venture for me. some couple of months back i'd have gambled diverse funds on rents turning out to be, the reason no longer a lot construction happening, human beings nevertheless mandatory housing , they might have not any selection yet to lease, made a;lot of expertise to me. Rents are dropping, why? I nevertheless cant somewhat artwork that out, needless to say there is unexpectedly a extensive grant of condominium property and human beings can p.c.. and choose . Housing is inexpensive and gets extra low value, builders are snapping them up via fact they comprehend expenses will finally upward push (an prolonged time from now)! so they do no longer purchase to sell they purchase to take a position, they comprehend they'll finally make an extremely stable earnings interior the (very) long-term. quotes of interest right here have in basic terms dropped right down to 2%, no longer a lot of this has been handed right down to modern loan holders, and your feller is finding for a g'teed 7% for 15 years??? I dont comprehend the variety you have worked out your predicted 'earnings' margine, yet I wouldnt touch it. What of venture , you need to spend 30,000 as a deposit to purchase those contraptions then gamble on protecting up 2 mortages. Sorry to me it incredibly is risking too a lot.
2016-09-29 09:04:25 · answer #4 · answered by ? 4 · 0⤊ 0⤋
You can invest in property any where, just remember if you are investing for rental purposes whta kind of responsibility you will have with it. You will either have to hire someone to take care of it or have it written in the rental contract that the renter is responsible for all repairs and upkeep. BEst of luck in your investing.
2007-07-09 03:46:41 · answer #5 · answered by uteva713 3 · 0⤊ 0⤋
It is the rental business and the way want to do it will decide.
If you want to employ a person to handle it (and ofcourse -if it is really warrents)you can invest in the rental home.
other wise if you want it on a lease basis you need not be there.once in awhile visit in the weekend to check the condition of the home.
it is very important that weather it is going to be profitable for you if you invest in these kind of investment
2007-07-09 03:59:24 · answer #6 · answered by Anonymous · 0⤊ 0⤋
If you think the market in that area will increase over time yes.
Do think about if there is a problem can someone locally help before you getting there to check on things being 5 hours away?
The best answer is if you feel the area will really appreciate in time.. go for it.
2007-07-09 03:46:21 · answer #7 · answered by kelly e 7 · 0⤊ 0⤋
Sure IF you hire a property management firm in that local area. Shop it to know what each firm charges and what services they provide. Just check them out first and know that you'll need to factor their fee into your numbers before purchasing the property making sure the bottomline works for you.
Many property management firms are also brokers, which you'll also need in finding a good tenant. For you own information, check both those that are strictly PM firms and those that are both broker/property management firms and draw your own conclusions.
2007-07-09 05:09:59 · answer #8 · answered by Brenda W 3 · 0⤊ 0⤋
ONLY if you are going to use a property manager! I'd use a property manager even if I was just renting out the upstairs half of a duplex, personally.
The first time you have a furnace or water heater quit on Christmas Eve, you'll be damn glad that you had a property manager to deal with it!
2007-07-09 03:46:06 · answer #9 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Unless you have a best friend or family member who lives there who you are also willing to compensate for their time... don't do it! http://www.choicefinance.net/
Inevitably, you will have to make trips to the property. Do you want to spend your weekends and vacations at this property instead? If you have a family, they will resent you and the property. Again, only do it if you have a trusted person you will fairly compensate for their time that lives within 20 minutes of the property.
2007-07-09 04:26:57 · answer #10 · answered by Anonymous · 0⤊ 0⤋