Advice on buying my first rental

[Tim Phillips]

I am a general dentist in the Akron area looking into purchasing my first rental property (specifically condo's).  The locations I am looking into right now are Conway, SC and Titusville/Melbourne, FL.

What drew me to these locations are the lower costs of condo's relative to the greater Akron area, as well as the properties are sitting on the market much longer than in my area, and overall higher monthly rents.  The drawback I have is that it is difficult to pounce on properties that are still selling relatively quickly with the commitments I have  to my patients in my dental practice.  

What advice would you offer to someone with no experience to date with rentals in terms of selecting the best location to look for properties?  I have had several friends suggest that it would be wiser to start off with rentals within driving distance of where I live.  Just curious and would appreciate brutally honest thoughts.  Thanks!

[Jackson Ebersole]

Hey there! Thanks for sharing your situation. As a fellow professional looking to get into real estate investing, I can definitely relate to the challenges of balancing your practice with exploring investment opportunities. Here are some thoughts on your situation:

Local vs. Out-of-State Investing:
Your friends have a point about starting locally. There are some real advantages to investing close to home, especially for your first property:

• - You know the area better
• - It's easier to manage and check on the property yourself
• - You can respond quickly to issues
• - You'll have a better network of local contractors, realtors, etc.

That said, if the numbers really make sense in Conway or Titusville/Melbourne, it's not impossible to invest out-of-state. You'd just need to be extra diligent about your research and have a solid team on the ground there. Looking at the data you provided for Melbourne, FL:

• - Average rent is around $2,000-$2,100
• - Rents have actually decreased slightly year-over-year
• - There's a wide range of rental prices ($650 to $6,500)

This suggests a diverse market with potential opportunities, but also some volatility. You'd need to really understand the specific neighborhoods and property types to make a good investment.

If you do go the out-of-state route, a good property manager will be crucial. Factor in those costs (usually 8-10% of rent) when you're running your numbers.

You mentioned the challenge of acting quickly on properties while managing your dental practice. This is a real concern, especially in competitive markets. If you're set on out-of-state investing, you might need to work with a realtor who can act quickly on your behalf, be prepared to make offers sight-unseen (after thorough virtual vetting), have your financing lined up in advance.

For your first investment, there's a lot to be said for keeping things simple. A local condo that you can easily check on might be a good way to learn the ropes of being a landlord without adding the complexity of long-distance management.

Out-of-state investing, especially in areas prone to natural disasters like hurricanes, comes with additional risks. Make sure you're comfortable with these and have appropriate insurance coverage.

Ultimately, the "best" location depends on your specific goals, risk tolerance, and how hands-on you want to be. If you're looking for better cash flow and don't mind being more hands-off, the out-of-state options might work. If you want to learn the business up close and have more control, staying local could be better.

My honest advice? For your very first rental, I'd lean towards staying local. Use it as a learning experience. Once you've got a handle on being a landlord, then you can explore out-of-state opportunities with more confidence.

Whatever you decide, make sure to do thorough due diligence, run your numbers carefully, and don't rush into anything just because it seems like a good deal. Good luck with your investment journey! If you need to talk about financing for your rental property feel free to connect.

Best,

Jackson