Who Has Purchased Rental Property Where They're Looking To Relocate?
Hi,
I'm interested in relocating to the Spokane/Coeur d'Alene area from Southern California and would like to start investing in income property in Spokane before actually relocating. Am I absolutely out of my mind or is this fairly common and there are accepted techniques for getting started and doing this successfully? I appreciate any and all suggestions.
Thank you,
badb
I'm also considering a similar move, though mine is a good 5-10 years off. Still I've been looking into it and what I've found is that there are really two key things you need to do.
1. Research the area to make sure that you udnerstand local demographics, neighborhoods, rental trends, financial organziations, etc.
2. Find a quality property management company to manage your properties while you're still in the relocting process.
There are of course more risks in any remote management situation (you will still need to manage the management company), and you might have less cash flow becuase you're not around all the time to look at various ways of cutting costs and improving efficiencies, but it's definitely doable if you're ready to commit the time to learn about a completely new market. And it really is a learning experience. Sitting in NY state and looking at Florida, I'm finding a huge number of differences in everything from building styles and materials, to regulations and demographics. Lots to learn.[ Edited by alexlev on Date 03/26/2004 ]
I've actually done this. I live in Michigan and want to move to Florida in a couple years. No, I'm not a senior citizen yet. I have at least 20 years to get to social security age.
I started buying VA foreclosures in Florida a couple years ago. I found out about an office in Tampa that specializes in selling to out-of-state investors and hooked up with them. The VA prices were only fair but the financing was outstanding so I bought four properties total. VA has ended this program but there are still deals to be had.
You will need to hire a professional management company and keep a close eye on them. Don't expect them to handle everything exactly like you would. Be sure to inspect the properties yourself at least once a year (can you say "tax deductable vacation"?) and demand that maintenance be done if needed. Also, don't expect any smoking hot deals at 70% of FMV. You probably won't have that kind of visibility or ability to act in the market. If you can get a small positive cash flow in an area with good opportunity to appreciate you're doing good. Remember the old saying "perfect is the enemy of good".
I hope this helps. Happy Investing!
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Moderator comment: Only the actual cost of the trip to visit your out-of-state property and the direct costs attributed to your property inspection visit are deductions. The portion of your vacation that is not related to your property, is a personal expense -- not a deduction. For example, you spend one day with the property manager and inspect the property. That day is a deduction on your Schedule E, but the rest of your two week vacation is a personal expense. Additionally, if your spouse and children also accompany you, their pro-rated portion of the lodging, meals, and incidential costs for that one day are not deductions either.[ Edited by DaveT on Date 03/26/2004 ]