Did you know that US rental prices in 2022 were 12.8% higher compared to 2021?
Investing in real estate can be very profitable, especially if you buy property in a different state. However, navigating the complexities of long-distance real estate investing requires careful planning.
Continue reading for four fantastic tips to help investors when buying property out of state.
1. Research the Market
Before you invest, take the time to learn about the market in the state you're interested in. Look for places with good job opportunities, a strong economy, and high demand for rentals. Research rental prices, how many empty properties there are, and the potential income you can make.
Talk to a local real estate agent or property management company to get information about the market.
Also, consider property taxes, insurance costs, and the local laws for landlords and tenants, as they can differ in each state. Considering all these factors will help you accurately calculate your return on investment.
2. Connect With Local Experts
It's essential to have people you trust in the state where you want to invest. Find local real estate agents, property managers, contractors, and lawyers who know the area well. They can share their expert advice, help you find the right property, and guide you through the legal process.
You can also join real estate investment groups or go to events where you can meet other investors and learn from their experiences. Building a network of people who know the local market will benefit you greatly.
3. Use Technology and Online Tools
Technology has made it easier to invest in property in another state. You can use online tools to look at properties and get all the information you need from the comfort of your home. Virtual tours, photos, and online listings allow you to view the property and decide if it's right for you.
If you don't want to travel, you can make video calls to talk to people like property managers or contractors. There are software and online platforms that help with things like tenant screening, collecting rent, and managing maintenance requests. These tools make communication and managing your property easier.
4. Conduct Due Diligence
Thorough due diligence is vital when buying property out of state. Hire professionals to inspect the property and evaluate its condition. Failing to do so can cost you dearly further down the road.
Check financial records, like how much money the property makes and what taxes you'll have to pay. Make sure you know who owns the property and if there are any debts or problems with the title. Find out about local laws and if there are any planned developments in the area that could impact property value or rental demand.
Add to Your Investment Portfolio by Buying Property Out of State
With a solid investment strategy, you can succeed when buying property out of state. Following the four tips detailed above will put you in a strong position to enjoy a higher return on investment.
Our trusted property management team at Avalon Realty and Oaktree Management have more than 30 years of experience in this field of work.
You may need guidance along the way, so don't hesitate to contact us. We're experts that want to help you succeed in your real estate investing journey!
Bonnie is the visionary that has driven the company and culture of Avalon since 1993. Her passion is improving procedures and practices; incorporating technology and value added services for both our clients and tenants.