Alaska vs Tennessee

[Christopher McIntosh]

Hello there. I'm in an odd situation where I'm currently working and living in two separate states, and I'm looking to invest in my first house, owner occupied for the first year then renting it out, and I'm having trouble figuring out which way would be the best route. I'm looking for something that will be able to allow me to quit my current job and mostly survive on the rental income. The two separate areas I'm looking at are Knoxville, TN (where I'm from) where I can find a house or duplex for around 100k, and probably bring in a monthly rental income of around 800, and the other is Anchorage, AK where I work, and there it's much more expensive, say 300k for a duplex but it would bring in around 2500. Knoxville seems the safer bet since it's less in case something were to go wrong like maitenance issues or not finding a tenant, I could still afford the mortgage while Anchorage would bring in more cash flow but would be incredibly difficult to foot the full mortgage if I didn't have tenants. I'm currently making about 65k a year and I'll have about 30k for a down payment towards the place. Of course these are all ballpark numbers and specifics could vary greatly but I was just curious what you guys would recommend. Thank you! 

[Bryan O.]

@Christopher McIntosh where will you be in 5 years? If your plan is to head back to TN it would make visiting your property in Alaska very expensive. Typically when good management goes bad it will involve getting out there to assess the things they lied to you about. Plus, you may want to check up on the property yourself simply because you own it and want to feel secure.

Nowadays, there's an app for people to go by and check up on it for you, but some people are not comfortable with that either. Since it is owner-occupied financing, you can't really buy 3 in TN or 1 in AK, so if you are very comfortable with that I would lean towards Alaska first. Again, this will depend on your specific scenario, time horizons, exit strategy, teams, etc.