Being an absentee property owner definitely isn’t for everyone.
I suggest using a professional property manager who knows the laws and regulations, rather than a friend, relative or similar, which can only lead to major headaches.
However, I have heard about pro’s being terrible and even going broke.
Having a PM is just like having an employee. Many people aren’t comfortable with this. Of course there can be headaches. Yes, it costs money.
It is hard to pick a perfect time to get in to the perfect area. Many people chase performance, just like buying last years best mutual fund.
I had a call recently about an area in Texas that they were interested in and I asked her why “that area”..
She had read an article in a magazine about THAT being the place to be…. that was sooo last year.
It’s like the people who get stock advice from Jim Cramer.
(Beyond me, but plenty of people just cannot think on their own, relying on “analysts comments” to buy and sell stocks)
Another caller a few days ago told me that he bought two houses in Texas a year ago, had a terrible property manager, couldn’t rent the houses, was losing money, and they were worth less than he had paid.
As far as areas, I believe that there are literally hundreds that make sense for people with a long term horizon and realistic expectations.
If anyone is serious about out of area property ownership, below are a few ideas.
One of my “crazy” suggestions would to be within an hour of an airport that Southwest Airlines services.
I’m comfortable that they have invested a fair amount of time and money investigating before opening a station in a market. OR another similar large retailer.
I know one area that wanted a Home Depot for years, but HD wouldn’t open in their market until they reached 50,000+,
and they were in the high 40,000…..
Once they reached a solid 50,000, HD opened and then Lowe’s did too, right down the street. They now have two huge Walmarts in the area too.
NEW markets for Costco, Sam’s Club, Wal Marts, etc is like getting free top notch market analysis.
Of course it’s nice to know sooner rather than later. Conversations with a local commercial property agent can yield lots of information. Ask pointed questions about what you want to know, and listen to the answers. It’s a wealth of information.
Another great spot is a local coffee shop with old timers who are the regulars. You don’t need to be a genius to walk in to the joint and see who they are. They KNOW what’s going on around town.
I wouldn’t be looking for information at the local tavern or from the young well dressed guy/gal who is driving a BMW.
(I’m probably looking for a guy that drives an OLD beat up truck)
I’d say that you need to visit and see the area. It’s not hard to see growth, even if you’ve never been there before.
Many areas just have a good feel to them, while some areas are just depressing. Like looking for your first house, the more you see, the more you will know what you like and what you don’t.
A guy recently told me that he has made hundreds of thousands of dollars owning homes out of state that he has never seen. I suppose it’s possible, but not something that I would recommend.
Middle of nowhere might offer a cheap property on 10 acres, but with a local population of 300, it can be hard to find tenants. If the area isn’t growing, you might be able to make money, but it’s going to be a struggle.
I’ve recently looked at parts of Utah and Ohio that are just dead, very little happening there. Other parts look very interesting, and not always “in town”.
Newer suburb areas often offer strong growth potential.
