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Investing In Out-of-State Property

Dora Pinter

Investing in a property can be risky, but the rewards are worth it. If you find a property that meets your target price and checklist, this can be an excellent opportunity. However, if it is found in a distant location, you may encounter a lot of challenges. 

Our team at Service Star Realty has written this article to help you understand the various challenges and the benefits of investing out-of-state. We will help you review critical factors to ensure you are prepared to deal with the common issues faced by out-of-state real estate investors.

When To Buy Out-of-State Properties

Living in an area where real estate is more expensive can make it difficult to own investment properties. One solution to this problem is investing out-of-state or being a long-distance landlord. The areas out of your state might have the potential to give high investment returns at an affordable price.

You should research more about the area you are planning to invest in. Some states may offer better property appreciation, lower taxes and mortgage costs, and even affordable investment properties than where you currently reside. These factors help you make your investment returns quicker.

Challenges That Come with Out-of-State Property Investments

When investing out-of-state, there are various challenges you might have to face. The first step to becoming prepared against these challenges is to research your chosen area as much as possible.


This requires you to research more about the neighborhood by interviewing the local residents. You can also seek the insights of professionals, such as our property managers at Service Star Realty. 

It also means taking the time to study the local laws and regulations covering property ownership and property taxes in your chosen area.

Out-of-State Networking

As a long-distance landlord, it is crucial to develop a solid network to ensure proper management. Review the reputation of local property management companies, vendors, and maintenance specialists.

Having the best support system and selecting the right local property manager to partner with is key to your success as an out-of-state property investor. Since you reside far away, you must be able to entrust your investment to the right team right team to oversee your rental unit.

Out-of-State Duties

As an out-of-state property investor, you still need to check up on your property at least once a year. It is advised to schedule in-person visits to your property at least once a year to ensure your property is in good condition.

Doing this means setting aside a budget for regular property visits. Aside from this, you will also need to handle homeowners' insurance, mortgage interest, and property downpayments as a part of purchasing an out-of-state property.


Additionally, you need to attend to your taxes since you are generating earnings in another state. You need to consult or hire a tax professional or a property management company to help you organize your tax obligations and ensure you comply with the tax laws.

The Right Distance

If you intend to buy out-of-state real estate, make sure that it is still relatively near, so the cost of visiting is lower, and traveling will only take a short time. This can help you save on additional costs of property management.

Tips Before Buying Out-of-State Properties

Research the Property Thoroughly

You should avoid buying properties you have not seen yet no matter how appealing it looks in an advertisement. Sometimes, the information you find online can be outdated and the property may already be sold to another buyer. This is a great practice to avoid property investment scams.

You might also end up purchasing a property with issues, which require more time to resolve. It can be subjected to a health and safety inspection or have deep maintenance issues that require costly fixes.

Hire a Professional Property Inspector and Manager

To ensure that the property’s condition is excellent, you need to hire a specialist to conduct a property inspection. In addition, being a long-distance landlord requires engaging the services of a dedicated property management team like Service Star Realty.


As it will be tough to perform property inspections and maintenance as a remote landlord, you need trusted professionals to ensure the rent is paid on time, maintenance is consistent, and tenant issues are resolved. 

Seek Pre-Approved Loans

Getting pre-approved loans helps you close property negotiations quickly when you see an out-of-state property that you like. You should check with different local lenders and review their different mortgages and rates to achieve the best price.

Pick a Familiar Area for Your Investment Property

It is best to narrow down your out-of-state property choice to a familiar area. The good thing about investing in another state is that the IRS provides tax benefits to landlords. Being familiar with the area you are investing in can help you choose the right property with the necessary features you like. 

Bottom Line

Investing in an out-of-state property is a profitable journey, filled with its own set of challenges. By adhering to the tips mentioned in this article and being cautious of the challenges, you can successfully invest outside your local area.

If you need help choosing and managing the right property, consider partnering with Service Star Realty today! Our team of experts can help you streamline the property management process, ensuring you make the most out of your rental property.

Contact us today to learn more about our services!

Service Star Realty

2929 East Camelback Road #119, Phoenix, AZ 85016

(480) 426-9696

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