Investing out-of-area for your first property

[Milo Mincin]

While I am still working through the educational and saving phase of my investing journey, the main predicament I am facing for what to do next is where to invest. I am planning to stay around the Seattle area. Is it worth investing in a relatively expensive market and house hacking in order to get a lower down payment and learn the ropes of management or investing in another market to potentially achieve a better return, but outsource management responsibilities? 

This seems like a common problem for new investors, any thoughts are appreciated!

[Maureen McCann]

Hi there @Milo Mincin!! This is a great question, as you said it, a lot of new investors have this question. The quickest answer is to invest in a market you are more familiar with. This doesn't mean that you can't invest in a new market, it just means you have a little more research work on your hands. 

Whether you’re investing out of state or one street over, the number one priority is data - statistical data- on vacancies, maintenance costs, average length of stay, eviction rates and average move out costs, the list goes on. Don’t put your money into a new market without getting a firm handle on the data first.

Do research on the areas the properties are in. A good first step is just looking at the property and the neighborhood on Google Earth and seeing how the property looks, is the house unkempt, how appealing is the neighborhood, etc. If the prop is listed as an A- but a quick Google Earth shows otherwise, it’s time to look elsewhere. Of course, market research is crucial, but nothing beats looking at the props and the areas in person. I usually recommend that folks take the time to visit their top markets before pulling the trigger.

Best wishes!! :)