Which type of real estate is better long distance?

Question

I am currently in the military and stationed in Newport News, VA. I am looking at purchasing either a small single family home (which I would finance through a conventional loan or through a contact I have who offers seller financing) or I am looking at purchasing a duplex with and FHA loan to house hack for 12 months and rent it out immediately after.

The issue I'm having is if I go through with one of these scenarios, I will be moving back to the west coast in about two years.

I would have to then use a property management company on the property. I am curious to which property in general would make more sense if all the numbers were identical. Does one have more advantages over the other? I know multifamily tend to have a higher turnover rate which in turn would cost me more. Is there any other factors I should be considering?

Thank you

Alex Bok · Answer

Would love to hear thoughts on this. I have only worked in my local area Chicago and have not bought investment properties outside of my state but would like to.

I have provided turn key rentals for out of state investors but it is because they like many others like the passive investing style. I've been trying to reach out to other folks in smaller more upcoming areas

Account Closed · Answer

I assist several out of state investors with investment purchases in Kansas City, MO.  Most are able to purchase sight unseen with the information and peace of mind that we provide.  The most important factor to your investment is the property management company that you work with!

Ali Boone · Answer

There are a few considerations. Here's a pros and cons of SFR vs MFR-

https://www.biggerpockets.com/renewsblog/2014/12/2...

Just be sure too you are running all the numbers right. Typically it's hard to find positive cash flow in that area on most properties.

https://www.biggerpockets.com/renewsblog/2013/01/1...

Hope those help!

Lumi Ispas · Answer

@Blake Burnett & @Jacqlyn Stoltenberg , A lot of out of the country and out of state investors I work with,  buy newer condo units in Downtown Chicago. Those condo units have low assm. and very little maintenance. I have clients in a multitude of countries and states that manage their condo investments through text message. When they need a new tenant they just pay the usual fee and they have few maintenance guys info in their phone for small issues.

The another option we have in Chicago is newer construction 3 flats with high-end units that are fully remodeled which again have low maintenance. You might want to hire a management company for those buildings, if you really don't want to check your text message often, however, I have clients managing those from out of state also.

Interested to see what you'll choose.

Thomas S. · Answer

SFHs are in fact more expensive to operate and have a much higher risk factor due to vacancies. Neither SFH or multi have more or less vacancies the difference is with a SFH a vacancy is 100% loss of income. This would be extremely rare in a multi.

IN your case your best option would be a turnkey purchase as you are new to the business and not intending to be fully engaged in the operation.

Bill Gulley · Answer

I pretty much began my rentals as you are, while in the Army. The advice I ran with is the advice I give, always buy the most marketable property while in the Service, you never know when or where you'll be going or if you will need to sell.

A nicer detached single family will be more marketable than any duplex, anywhere and anytime, you have the broadest market to attract a buyer. Appreciation is generally higher as well, that goes to location.

Income wise, the duplex has a hedge against vacancy, but when it comes to having one appraised for financing, the comps are harder to find, the duplex market just isn't as active.

And, I bought nicer homes, my tenants were senior NCO's and Officers, LOL, they all out ranked me but they were very good about playing the role of a good tenant. Also, several times when my tenant would PCS, they got their replacement in that unit to take the lease, take care of them and they will take care of you! Good luck :)

Which type of real estate is better long distance?

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