Out of State Investment (Austin/Houston/Portland)

[Account Closed]

Hi, 

I am looking to invest in the range of 300-350K. The objective would be investment, so I would be looking for good rental properties. 

I live in San Francisco, but can't afford anything in the bay area, hence I am looking at areas like Austin, Houston, Portland etc. No particular reason to select these cities.

I am looking at more of a passive investment, so something that doesn't involve frequent travels to the location. 

I wanted advice on how to get started with it, specifically,

- How to shortlist properties ( I was thinking of 1 or 2 bedroom apartments as they are easy to rent out)

- Should I go with a property management company/agency for the end to end process (buy then rent) or buy first then look for property management company

- How risky is it to rely on property management company completely and manage remotely

- Any other advice

Its my first post to BiggerPockets so apologies if its not as per the guidelines. 

Regards,

Ajitesh

[Andrew Johnson]

@Account Closed I don't mean to sound awful when I say this but: start over.  If you're selecting cities with 'no particular reason' you're probably going to end up a little on the unhappy side.  Heck, just rationalize Portland because it's closer, easier to visit, etc. than Houston.  Or say "Houston" is the answer because you want to retire in Texas because they have no state income tax.  It doesn't matter (in my opinion) what the reason is but, have a darn reason.  If you don't have an "investment thesis" you're sunk.  And, again my personal opinion, you need to the one that comes up with that thesis.  It's your money and (subsequently) your debt so you can't really depend on someone else to create that thesis for you.

That thesis can guide you to short-list cities, areas within cities, property types, etc.  Without that thesis you're firing with a shotgun in the dark.  Even looking at targeting 1-2 bedroom apartments is a bit of a shot in the dark.  If I was .5 miles from a college campus I'd love 1 bedroom apartments.  If I wasn't, I'd probably opt for 2 bedroom apartments for ease of rent.  So even your target "type" of property can vary based on the "where" in the equation.  

All of that rambling aside.  Yes, I'd use a property management company.  No, you don't have to go the turnkey route with "built in" property management but you could do worse.  BiggerPockets, realtors, etc. can all give you referrals in any given market for a PM.  When you fly out to vet a property pre-purchase you can call/screen/interview/meet property management companies while you're there.  However, no matter what diligence you do, it's a risk.  But it would be a similar risk if you bought it Fresno.  Absentee, in a lot of cases, is absentee.  It doesn't matter if you're 100 miles away or 1,000 miles away if you're not going to visit the subject property regularly.

At this point I'm both rambling and sermonizing.  Still, come up with your thesis, see how these cities (or others) map to that thesis, and move forward from there.  By the way, you can always change the thesis but you need it (again, my opinion) in order to effective start to narrow your focus.