Hi all,
I live in NYC and I am thinking about investing in Albany. I am new to real estate investing and want to minimize pitfalls. Does it make sense to invest in properties that are 2 hours away?
Should I start local and then once I am more experienced look into properties that are further away.
Thanks!
What about places like southern CT as well? You might find some good deals in Bridgeport and New Haven.
Starting local is a great way to learn values and your market area. When you start making $1000 an hour per deal , then it doesn’t seem bad to drive 2 hours for a deal.
Darin
Hi REINYC,
I think it is smart to start local so you don’t expose yourself to risk associated with markets you are not familiar with.
I totally agree with starting in an area you are familiar with.
reinyc,
I would strongly suggest starting close to home. The vast majority of newbies fail in a short period of time even with the properties in their own back yard. Trying to do it long distance only adds to the problems.
Regardless of where you invest, run the REAL WORLD numbers to see if the deal works. WIth REI, it’s ALL ABOUT THE NUMBERS!
Mike
It’s a common belief to start close to home because that’s what enough people say to do for it to become a common belief.
The issue here is due diligence. I know phenomenally successful investors who invest far from home. I also know phenomenal failures that stick to their back yard. Regardless of where you invest, be it your own neighborhood or Taiwan, you must do your due diligence or you will become shark bait.
Tim
The distance from the property to you doesn’t really matter that much in my opinion. You would rather invest somewhere further away with higher annual cash flow.
I agree with those that say start close to home. As a wise man once wrote. "If you were going to open a hardware store you wouldnt open it 1,000 miles away would you. "I couldnt agree more . However once your store starts producing and you start getting a grasp on the mechanics of the market you may want to start a franchise.
I think it doesn`t matter where the property is.My nearest property is an hour away
and I never had any difficaulties with them. :biggrin
Yea because what if the area close to you is out of your price range?
I mean thats my situation and why I am finding it difficult. I happen to live in a apt in an area where you dont find houses less then 200k. We are not prepared to start that high until we have better cash reserves for carrying costs. So I have to go out of my neighborhood.
I mean isnt that a smart approach?
So I have to go out of my neighborhood. I mean isnt that a smart approach?
The thing that matters in the real world is the NUMBERS! It is easy to say that long distance rentals aren’t difficult or that you can do it. However, the real question is how much additional cost is associated with YOUR long distance rental and how will that affect YOUR cash flow. Will the property manager eat up all your profit with fees for placing tenants or scheduling maintenance? Will the tenants tear up your property because the manager doesn’t care? Will the manager place just about anyone in your rental because he charges “one month’s rent” for placing each tenant? Will you be out of touch with local events (like a big employer moving overseas) and that will cost you a bunch of money?
I wonder how many people that are promoting long distance rentals actually have a significant portfolio of long distance rentals themselves?
Mike
I will not have long distant rentals myself until I can build a company to run them . However I do Promote Long Distance Flips. Buy it sight unseen, resell it sight unseen. Ive done several of these and, I like it.