Posted by RichV(FL) on August 26, 2003 at 10:47:53:
Tom,
I live in the Sarasota area of Florida. I invest out side my market a bit. I own property in Charlotte County (to the south) and Pinellas County (Aprox. 1 hour north).
If the drive does not bother you than dont worry about it. To me the investments I have made outside my area are well worth the driving I have to do for them from time to time.
Best of luck,
RichV(FL)
Investing out of your immediate area - Posted by Tom Brown (GA)
Posted by Tom Brown (GA) on August 26, 2003 at 08:28:02:
I am interested in any experiences, advice, etc. on investing in markets beyond your local area.
I am interested in investing in a larger market approximately 1.5 hours from my home. The reason is that we would like to relocate to this area in about three years and we want our business in this area to be set up before then.
Comments on board or off board are welcome.
Re: Investing out of your immediate area - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 26, 2003 at 10:59:00:
Tom Brown–(GA)---------------
Well, I have invested for about 15 years in Sacramento, CA, which is about 90 minute drive from my home in Oakland, CA.
One major problem is that it is difficult to go over and fix little things. I remember driving over to turn on the wall heater of one unit. The renters said that they were cold and that the heater was not working. I got over there and found that it was turned off. “Oh, right. We forgot about that. We turned it off in the spring because we don’t need it during the summer.” Ok. Fixe and now another 1 1/2 hour drive home.
I now try to get renters to be more descriptive about the problems they say they are having.
It would be good to have a local handyperson you can trust to do some of the smaller tasks for you. Also, you probably better schedule some appointments to inspect and repair on a regular basis, two or three times a year. Be prepared to deal with “oh yes, while you are here, we have been having some trouble with … .” If you do preventive work and cut off problems early in their development you will be better off.
One problem I had was not going over to collect delinquent rent. For a renter who is local, it is possible to drop by several times a week. Not so when you are driving 90 miles.
You can probably set up ways to deal with properties at a distance, but it is certainly not as easy as when you are close by. I would recommend that you not do it the way your propose. Instead, I would suggest you concentrate on building up your property management program where you are now. Then, after you move, start doing 1031 exchanges into new properties where you live.
You see, you will be in same situation, living a long way from your rental properties. However, you will have some advantages working from the new base and investing at the old one. You will know your renters better and will know whether to move quickly when they call or not. You will know the stores to buy things, you may know some handyhelpers to hire. In fact, that might be part of your planning: hire handyfolk locally while you still live there and watch how they work.
Then, as renters move out, you can sell the properties and do an exchange into the new location. Hopefully, by the time that you do that, you will know the locations where you want to invest in the new location better than you did when you lived in the old location.
Also, the properties that are no trouble for you in the old location you will keep longer. That seems like a good idea to me.
I think I am right. Do it in the order I suggest.
Good InvestingRon Starr***