Pros/Cons of out of state investing

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Pros/Cons of out of state investing

Thomas Cottrell
Rental Property Investor · Wichita, KS · Member since 2019 · 4 posts · 0 votes

Hey BP!

I’m new to rental property investing, and I’m trying my best to educate myself and build foundational knowledge on real estate investing as a whole. I am part of an investment group made up of 6 people most of whom live on the east coast (SC, NC). A couple of us live further west (KS, MN).

Therefore, I am interested in what experiences/opinions others have about out of state rental property investing?

Thanks in advance!

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Noah Swank
Investor · Wichita, KS · Member since 2014 · 47 posts · 15 votes
7y

@Thomas Cottrell

Hi Thomas, I saw your post on learning about investing out of state, I’m working on the same. Would love to grab coffee or lunch sometime if you are free.

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  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Thomas Cottrell

    Hi Thomas, how's the Wichita market?

    I'd be very reluctant to be an out of state investor unless you have to be.  I am not a fan.

    0Reply
  • Shane H.
    Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
    7y

    @Thomas Cottrell welcome and if you presently live in Wichita have you ruled out investing there?

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  • Michael Carbonare
    Investor · Fort Lauderdale, FL · Member since 2013 · 926 posts · 614 votes
    7y

    @Thomas Cottrell, you are correct about pros and cons of out of state investing.  In my experience the pros outweigh the cons.  Done correctly and with some due diligence on your part you can minimize potential risks.  Having someone on the ground near the property is a big help.  For me, I won't rule out a deal because it's located elsewhere.  I'm in Florida and I have done deals throughout the US.  Yes, there's the occasional hiccup, but most go according to plan.

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  • Noah Swank
    Investor · Wichita, KS · Member since 2014 · 47 posts · 15 votes
    7y

    @Thomas Cottrell

    Hi Thomas, I saw your post on learning about investing out of state, I’m working on the same. Would love to grab coffee or lunch sometime if you are free.

    1Reply
  • Thomas Cottrell
    OP
    Rental Property Investor · Wichita, KS · Member since 2019 · 4 posts · 0 votes
    7y

    @Jim Goebel

    Thanks for the advice! Our group’s goal is to own property in a state where at least one group member resides in. But we are curious about the alternatives as well (out of state investing).

    As for as the market in Wichita, housing prices are fairly low relative to what I’ve seen on the east coast. The cash that our group is willing to put towards a down payment would probably get us more house here than in NC or SC. However, with housing costs being what they are here, I’d have to imagine that the price point between being able to own a house and having to rent is closer. I would think this would cut down on the percent of the population who is on the renting side of the spectrum.

    Like I said, I’m new to the area and new to real estate investing. I need to do more number crunching and networking to decide if Wichita is a good place to invest.

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  • Thomas Cottrell
    OP
    Rental Property Investor · Wichita, KS · Member since 2019 · 4 posts · 0 votes
    7y

    @Shane H.

    I have not completely ruled out investing in Wichita. However our group seems to be leaning more towards investing in the Raleigh,NC area. 2 of our group members live there.

    Do you own any rental properties in Wichita?

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  • Thomas Cottrell
    OP
    Rental Property Investor · Wichita, KS · Member since 2019 · 4 posts · 0 votes
    7y

    @Michael Carbonare

    Thanks for the advice Michael. From your experience, what are some of the potential risks/hiccups that came up? Which ones surprised you more that others?

    0Reply
  • Aidan Mulligan
    Rental Property Investor · Charlotte, NC · Member since 2019 · 161 posts · 178 votes
    7y

    @Thomas Cottrell I’m an investor in Charlotte, NC. No advice on the out of state portion but if you and your group wants to chat about the Charlotte area I’d love to lend a hand

    1Reply
  • Michael Carbonare
    Investor · Fort Lauderdale, FL · Member since 2013 · 926 posts · 614 votes
    7y

    @Thomas Cottrell, if I'm doing a distance deal it's always with a short term approach, say a cooperative assignment.  Long distance, long term rentals can be problematic.  I've done a few over the years and it seems that small issues and problems become bigger when you're 2000 miles away.  But you can minimize that with some reliable people on the ground locally.
    All that said, my comfort level is long distance = short holding period.

    1Reply
  • Shane H.
    Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
    7y

    @Thomas Cottrell   yes I have 6 and manage 2 for a couple others.  Stopped buying anything the past 2 years to focus on our business in Topeka but by the end of this summer/start of fall I have a goal to start acquiring more in Wichita.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    you already live in a state were investors buy.. not sure why U would wonder about.

    SC in Charleston particular is very robust.. however do check prop tax's  the play there is LEGAL air bnb

    and student housing.. Students will pay 800 to 1000 a month per room.. 

    run the numbers..  But do keep in mind Charleston is basically a world class destination so 4 to 5 caps are the norm

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  • Jared Viernes
    Investor · Wichita, KS · Member since 2017 · 293 posts · 192 votes
    7y

    @Thomas Cottrell Wichita area is a great place to buy for cash flow. No shortage of renters here it is still very much a sellers market here because there is a shortage of housing.  If you are looking for appreciation you won’t get much but it is a great place for buy and hold.

    1Reply
  • Robert Burris
    Rental Property Investor · Wichita, KS · Member since 2016 · 64 posts · 29 votes
    7y

    @Jared Viernes I dont have any knowledge on out of state investing. I can say Wichita is a good place to buy and hold. I have 4 house rentals and am looking for a duplex as my next move. The nice thing about Wichita is a small investment can bring a steady income

    1Reply
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