Starting off as a long distance investor

[Adam N.]

Go easy on me, I'm new to all of this! I'm not 100% novice, I'm already a homeowner, living in Cleveland, Ohio. I would like to use savings and some home equity to purchase an investment property, perhaps a two-family home. I'm young (23) and have a good, stable job. I'm putting down a personal business plan on paper to help me lay out my long term goal, which is to own enough rental properties generating enough cash flow to live off of. The problem I see happening is my location. It seems like there are so many vacancies in my area, how can I be sure that I will even be able to rent the units out at all? Cleveland lost 10% of its population since the last census. I just don't feel confident in the rental market here, which is a shame because there are so many bargains on the market.

I would rather invest in bigger cities, especially known college towns like Boston, DC, Philadelphia.

Does anyone have any experience, or advice, on starting out as a long distance landlord? Or does anyone have a good reason for me to invest here in NE Ohio?

Let me know if you would like more information. Thanks!

[Jon Holdman]

Don't know much about any of these locations, but from the little I know I'd take Cleveland over Philly any day. I suspect Boston and DC are going to be pricey (high price to rent ratio). I've considered (briefly) trying to invest in Cleveland, even though its a long ways away. I think you're giving up on it too quickly.

I've never seen a situation where students pay a year in advance. I looked at student housing for a while and pulled back. They're complete pigs and totally disrespectful of your property. Assume that summers will be vacant. Students drop out of school mid term, then what? You're stuck with a vacancy until next term.

Any long distance investment is going to require a PM. You don't have to search very hard to find PM horror stories. I'm sure there are good ones out there, but there seem to be a lot more bad ones.

I think if you look hard right in Cleveland you can find some screaming deals. $5-10K units that will get $500 in rents after a few grand in fixup. I'm not on the ground there, you are. Get out and start talking to people and make contacts and I think you'll find good deals right there. If not right in Cleveland, then within an hours drive.