Buy Rental Properties Remotely: To Travel to See or Not?

Question

Hi BP!

I live in San Francisco but have family in St Petesburg, FL involved in real estate where there market looks to have much better cap rate, investor friendly pricing and none of this California rent control hooey.  I own a handful of multi-family rentals in Dallas, TX so it's not my very first rodeo but I am still getting my chaps broken in.

My realtor in FL has scoped and sent photos of several properties that look great on paper from the finances - low price, high rental potential and favorable comps.  I'm at a point where I'm ready to start making offers but am a little uncomfortable going in site unseen personally.  A flight from SF to Tampa is around $500 and 8 hours each way plus I'm no contractor so don't know how much more I'll know than an inspector I could send.  Additionally, the best priced properties need some rehab before being rent ready.  So the questions I'm posing are:

1. Is it a good idea to buy rental properties not having seen them and being across the country from them?

2. Is it worth the $500 trip and several days trip to see them myself before making an offer?

3. Would the trip be better spent after purchase to manage the rehab and tenant leasing?  Maybe I really do need to make two trips?  I've got a day job so fitting these in are all weekend and vacation time.

Long term I plan to hopefully move to St. Pete once I have a nice portfolio there a couple years from now.  Until then, any advice would sure be peachy, ya'll.

-Ryder

Andy H. · Answer

We bought some rental properties remotely site unseen because we thought we could trust the team we were working with. Found out after the fact that the neighborhood is less than stellar, to put it nicely. From Google streetview, it looked like a decent area, but if we had actually physically gone there, we would have realized what the neighborhood was really like and wouldn't have bought there.

So, besides getting to look at the particular properties you are interested in, going there can also give you a better feel for the area as a whole to make sure it is what you think it is.

Jay Hinrichs · Answer

@Ryder Meehan

nothing beats putting your eyeballs on the housing stock.

also want to check for flood insurance and wind  those can be much higher in that market

wind being hurricane not wind being tornado and hail like Texas.. you should not have the foundation issues you can experience in Texas either.

Dawn Anastasi · Answer

1. It can be a good idea and it can be a bad idea.  It depends on the team you have in place in the location you're investing.  If you have a good team you can trust, then it can save you money on travel.  If you can't trust your team, then it's a bad idea as they can send you pictures of properties that look good, but if you were actually there, you'd see what a mess they've made of things.  (Or lied, or used photoshop.)

2. See answer #1.

3. What do you know about managing a rehab and tenant leasing?  Do you believe you know more about a specialist you would hire to do the job for you?

Brian Mathews · Answer

Pay now or pay later.   Spend the $500 or spend $15000 later.  If you have family in real estate in the area, they should be able to hook you up with and inspector or contractor to walk them with you.

John Thedford · Answer

I would go look. You are spending a lot of money. Until you have actually closed a few deals using out of state support what do you really know about them? Also, even though it will cost you money, because it is a business trip for investment purposes you can write off your airfaire and rental car. Get a little sight seeing in...get a personal view of the area, and get an up close look at the property. Won't you feel better if you look first? I would!

Mehran K. · Answer

1. Buying sight-unseen is do-able. But it is ALWAYS a better idea to see things first. It's not required though.

2. Again, it's worth it, but not required. I would suggest it for a first purchase for sure.

3. I suggest AGAINST self managing from a distance. Someone needs to be there on the ground to manage the day to day in my opinion.

Hugh C. · Answer

I've bought 4 SFH rental properties without visiting the out of state properties even once before or after purchase (Texas and Louisiana).  It may have been luck, but all were rented easily after standard home inspection during purchase found no significant problems.  It can be done, but in retrospect it was rather risky.

Arun Chandra · Answer

Try the site below.. I heard them talk about it on one of the podcasts. They'll send someone out to the property for you.

Hope this helps, good luck!

https://www.wegolook.com/

Dawn Anastasi · Answer

You can listen to Podcast 73 for more information on investing out of area.

Ryder Meehan · Answer

Thanks for the feedback here Dawn and Brian.  It's sounding like at least one trip upfront would be smart to see the properties and meet/build a local team.

My experience is good in tenant leasing but less so in rehab.  The deals have plenty of margin to comps but I'm trying to read up on managing rehab. I also have a cousin who is a handyman locally which gives me a bit more confidence.

I'd love anyone else's experience on investing remotely if you've gone down that road.

Buy Rental Properties Remotely: To Travel to See or Not?

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