You'll typically have a lot of tenant challenges not to mention that you're maintenance and CAP Ex expenses will be a much higher percent of your gross income due to the fact that it costs as much to fix a leaky faucet or replace a furnace on a property renting for $900 as it does on one renting for $600.

Just saying ,the expenses for out of state properties is hard to manage when you have no physical, eyes on, level of work, or professionalism done,, until a problem really surfaces and then you've paid thru the nose, jump hoops to figure things out after the fact. 

My depreciation expense would be about $116k/yr, that's assuming just taking building value over 27.5 yrs.

Assuming all rents are substantial they should be able to cover my debt service and any other expenses needed (repairs, water, vacancy, cap Ex, etc.) 

So far I have been expensing  my education cost, application fees, and other association fees to the partnership.

In an ideal world, we could 'expense' the reno cost on the new home from the rental income from our old home.Any insight would be greatly appreciated!

I don't think that's possible in this case.Figure out the taxes and expenses and come back with the cap rate.

If I didn't realize before that this was the expensive and slow way to go, I sure did after writing that down payment check.

If they don't don't exercise the option in 5 years, we can just sell the property or do another lease option and we stand to make even more.The reason I like to do lease options over rentals is because in the majority of cases, I don't have to budget for the 3 highest expenses that come with rentals: vacancy, turn over, and capital expenses.  

Really enjoy remote management, my hometown (Philly) has gotten expensive for short term rentals IMO.