Managing out of state properties

[Herman Wu]

Hey everyone!

I'm new to Real estate investing and have been trying to learn more and more in hopes of purchasing my first investment property. Initially I was thinking about buying real estate in NYC. However, after reading a few threads, I think it makes more sense investing outside of NY. Could somebody give me some insights as to how to manage properties outside of the state you are residing in?

[Brian G.]

@Herman Wu, while I agree with you that real estate has become almost a non-option here in the NYC metro area and I invest outside of the city myself, it can be risky to invest somewhere you don't know well and trust strangers to safeguard your best interests. A "deal" in an "up and coming" neighborhood may be a total dump in a bombed out section of the city that shows little hope of panning out. Renting it may cost you 1 month's rent and, well, the agents still get paid if you have a tenant for 2 months and the default or not. 

Your management company is going to put a hit in your bottom line for 5-10% of monthly asking rents (whether something goes wrong or not) and, if you aren't close enough to verify damages to property, unsavory companies will bring in their own contractors to gut you for unnecessary repairs. Trust me. I had very trusted folks (including family) end up ripping me off; you'll be hard-pressed to do better with strangers, although there ARE some good companies out there. 

I don't mean to deter you, but you might be better off to save up enough for NYC or get together an investment group to go in on a larger property over going somewhere you don't know very well.

Either way, good luck!