Is it a good idea to buy my first property out of state ?

[Vincent B.]

Hi all, I'm new to real estate and I'm looking to buy my first investment property. I've been researching and learning about buying out of state property focusing mostly on duplexes and triplex's 50,000$ and under. I've been looking at places in the mid west. Would investing out of state be a good idea for my first purchase? Believe me I would love to invest in my own city but it's too expensive. I figured if I start out of state with cheaper properties once I gain enough income I could lean towards bringing my business back to California . Any tips or advice would be much appreciated .

[Ross Denman]

@Abdul Azeez as I work for a PM company as well as invest on the side, our PM company makes no money on vacant units. We actually have costs for every unit that we manage and no money coming in, operationally, it's a loss for us. I do know that some PM's have minimums or fees while a home sits vacant, but I would personally shy away from them. To ensure that your PM has the same interests as you, their bread and butter needs to be closely aligned to the success of your investment. If there's no rental income, there's no income for us either.

Thirty days on the market isn't very unusual this time of year, but things are picking up and most of our homes are off the market within 2-4 weeks. We have just had 2 homes this week that were on the market for less than 10 days.

In general, there are only 2 reasons that a home doesn't rent (if it's being marketed and managed properly.) There's either a problem with the condition or a problem with the price. Other reasons may simply be that the PM isn't marketing the property very well or the leasing agent isn't answering the phone, promptly calling back, schedule showings adequately, etc.

Do a google search for the address. Ensure that your PM has it listed on Zillow, Trulia, Realtor, Rentals, HotPads, Zumper, Apartment Guide, etc. Also, visit your PM's listing site and ensure that it is listed there. Do they have a Social Media Campaign? Are they listing it on Craigslist (Eww... I am not a fan of Craigslist rentals.)

Next, I would call the phone number for the leasing agent, see if they answer. If they don't leave them a voicemail and see if they call you back. If you do talk to them, tell them that you are relocating to Memphis for work and looking to see rentals when you come in town. Tell them that you will be visiting next weekend and that you would like to see the property. Try to schedule a tour at an inconvenient time... say 7:30 PM on a Friday evening. See how available and eager to show the property. Are they encouraging you to start the application process before then?

In our office, if a home is vacant for more than 30 days, we start diving in to find out why and ensure that we are doing what we can to properly service our investors. Sometimes it's just the area. Ask your PM if they have put out directional signs and if the sign in the yard is still there. Apply a little pressure to ensure that they are giving your property the attention that you expect out of them. Some PM's are very good at what they do, but many of them need to be questioned, pushed, and potentially even managed.