Luxury Rentals in Low Cost States

[Rick Albert]

Hey Everyone!

Myself and one of my investor clients (I'm also a broker) in Los Angeles are thinking of investing in the luxury space in low cost states.  For example, if the median price point is in the $200,000 range but we would buy in the $400,000 range.

Part of the reasoning is because we have property here that if we sell and do a 1031 exchange, it would need to be at the same price or higher and our condos are worth between $350K-$400K.

The other thought is with the luxury sector you might get more qualified tenants (I've seen when that statement is wrong) and the property might be in a better area (schools, etc).  Also with the cost of materials and labor continuing to go up, in the luxury sector that dollar goes farther (cost of a copper pipe is what it is).

Any and all thoughts are welcomed.

Thank you!

Rick

[Scott M.]

As far as I know  you can buy multiple properties on a 1031.  You don't have to buy 1 when you exchange 1.  Working with a client right now that bought 1 in FL and one in MI from the sale of 1 property.