Invest in Charlotte or another state

[Kristy Goelzer]

Hi all I am new to the site and looking for some advice. I was wanting to purchase my second rental property (currently own a townhouse in CLT) but the charlotte market is very hot and overpriced for my budget (wanting to not go over 250K). I am interested in either a single family home or a multi-unit as my first property. I plan to use a property management company for my rental. I am considering going out of state where the cost is more affordable but I am not sure if this is the best approach since I have limited experience ( I only have had one investment property that I rented out (managed by a property management company) and sold off a few years ago before the pandemic. I am wanting to get back into the real estate game and wanted to get some advice if out of state is a good idea or not since I am mostly a newbie or should I stick to Charlotte were I know the market well (lived here for 20 years)? Can you recommend any real estate agents that are investor friendly? Any advice would be very much appreciated. Thanks in advance for reading my post.

Kristy

[Evan Polaski]

@Kristy Goelzer, I am not from Charlotte, but know enough that you have a very diverse and strong employment base, you are the banking capital.  There are reasons it has appreciate so much.

OOS investing brings its own risks, in my opinion, and/or additional costs to attempt to mitigate (read travel costs a few times per year to check up on).  Small towns can get cash flow, but far more susceptible to dramatic shifts in downturns.  Remember all those GM towns in the financial crisis.  And guess who was able to leave first... the renters, since they have limited financial ties to a market with no limited employment options.

My personal view of risk is: if I am owning directly, I want to own where I can have eyes on the property and know the submarkets inside and out. I also do my own leasing, because tenants are the biggest wild card in returns.  Physical condition and markets you can generally understand risks before buying.  But tenants, particularly those installed when I used 3rd party managers, have not been the best, even though they "checked the boxes".  Shorter overall tenancy, higher turnover costs, and therefore more overall vacancy.