Buy a primary here(turn into rental) or rental property farther away

[Wayne Toh]

Hi BiggerPockets Community , I’ve just recently graduated and is working in the bay area. I really want to get started in real estates. My current conditions are that I am expected to go back to graduate school in a year but I am unsure which part of US that would be in. I am currently pondering between three options.

1. I buy a primary here in the bay area but that would stretch my budget out dratically because of the high prices here but turn it into a rental after. Due to my limited income, this could even remove the option of low down payment just for me to see an acceptable mortgage payment. If this is the case, should I start of with a condo or SFH and house hack. 

2. I invest further away (maybe Central Valley/Nevada) but I am still able to manage the property. This allows me more purchasing power and I still have peace of mind being able to see the property as I am just starting out and want to learn more, (rather than leave it to a management company).

3. I invest OOS, where my risk tolerance is the lowest and may end up purchasing a lower priced property well within my budget where I can cover any vacancies/emergencies using my own capital. If so, what are some good appreciating markets with good economic growth and safety? I've been looking into areas in Wisconsin and North Carolina  (I chose these areas  because I have people there who could potentially help me out in the area) but all market ideas are welcomed. 

I am very new to all these ideas and have been watching the podcasts, youtubes and reading articles as well, trying to narrow down my options. So, to all investors who are willing to share some ideas, I greatly appreciate it and with your help, I hope to become a reliable member in the future as well!

[Samuel Diouf]

I'd say buy a duplex and use it as your primary if you can. House-hacking is one of the best ways to get your foot in the door of investing. You’re able to learn the basics of a real estate investment with lower risk and build equity at the same time. Being able to enter a property with only 5% down means you can leverage your money way more effectively as well. When you leverage money personally, I think it makes more sense to invest in appreciating markets

If the duplexes are too expensive in your market, you could look into investing in the Midwest.  Many investors from California are choosing to invest in the Midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus because of the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/