Looking to buy rental property out of state

[Jim L.]

Good morning everyone.  I am fairly new to the community, and have been definitely stuck over analyzing instead of acting.  Between the interest rates and cost of houses, I have been very hesitant to pull the trigger, especially me living in NY on Long Island where the cost is insanely high.  I have kind of pivoted to looking for a location I am looking to retire ( somewhere in Tennessee by some water source ) and want to buy it to rent for the time being.  Can anyone point me in the right direction as far as finding accurate rental comps?  I've heard getting at least 1% of purchase price but know it isn't always as simple and straight forward as that.  Also this is very daunting to me being my first rental property and it is so far away from where I live.  Any long distance rental advise would be greatly appreciated.  

[Adrienne Green]

@Jim L. it sounds like long distance investing is a good fit for you!  I would second the recommendation for David Greene's book on it, as someone who invests long distance and helps others do so, I think a lot of people would avoid pitfalls by reading the book.

I would also say Zillow and Hemlane have rent estimate tools in terms of a LTR. You may also consider STRing the house, that way you could visit it periodically prior to the move. If you want to STR, I like Rabbu for rent estimates. Depending on the price point and type of house you're eyeing, it may be a better fit for an STR than a LTR as well. For example, in the Chattanooga market it's tough to get over $3k/month in rent. If someone can afford that, house prices are affordable here, so they'd just buy a place. So if you wanted a higher end house that would warrant a higher rent (and would require one to cover its costs), then STRing it may be a better fit.

The 1% rule is not likely to be met in an area where you'd want to retire, on the water.  In my market, and many others, you'll see that in more C class areas.  Also, the 1% rule doesn't take into account your costs, like taxes.  TN has low property taxes and other expenses, so you can cashflow on a property that is renting for well below the 1% rule.

I hope this helps!