Investment outside your own state can often be more profitable.
At first glance, investing in properties out of state may seem odd. How can you wisely invest in properties you may never have seen?or will see? What do you do when things go wrong? However, investing out of state often pays off handsomely, especially for young investors.
- The locality where you live may have high property values, but properties out of state could be ideal for your cash flow.
- Investing out of state allows you to diversify. For instance, if you own properties in five states and a shaky economy affects two states, you?re still covered by your other investments.
- Diligent research helps find ideal out-of-state places. One of the most common moves is to buy houses, perform repairs and renovations, rent them to tenants, and once all that is established, sell the property as an investment to yet another party. This is turn-key investing, and these factors make a locality attractive.
- Low house prices compared with high renting prices
- Stable and strong local economy
- Low taxes
- Growth potential
- Foreclosures and chances to nab properties for less than their market values
You can even look overseas if you?re so inclined. One tip is to follow where hedge funds are investing to find good localities for your investments.
- You can take tax write-offs for business trips to these localities. Of course, consult with your accountant.
- Hiring a maintenance team in that area makes taking care of repairs and the like a snap. It?s easier if you invest in an area where you have some sort of tie, such as you grew up there or went to college there.