As a real estate investor, the thought may have crossed your mind to purchase rental property in another state. This may be due to having family in that particular area, the desire to live there in the future, or possibly even because you have come across deal that is hard to refuse. But, before moving forward with the investment, there are several things to consider before purchasing an investment property that you cannot quickly or easily get to on a regular basis and / or that is located beyond your state line.
Taxes
Owning property in another state may mean that you will have to file a state tax return in both your home state, as well as where the property is located (if that state has a state income tax). This is because you will need to pay income tax in each of the states on the income that you earn.
Expenses
If you own a property that isn’t within an easy commute, you will also need to consider the additional travel expenses of getting to and from your investment. Being far away from the property can also mean added costs, even for easy maintenance, because you either need to take the time (and cost) to get there, or you will need to hire someone else to do the work.
Time
An out of state investment property can also mean additional time spent managing it. Just simply getting there and back could take hours – or even longer – depending on where the property is located.
One potential solution here would be to work with a property manager that is located near your investment. Doing so can help to cut down – or even eliminate – the time that you spend managing your property, as well as the tenants who are residing there.
Knowing that the day to day duties are taken care of can allow you to still obtain the benefits of your investment, yet without having to concern yourself with getting there for every little item that comes up. For more details on how working with a property manager can be beneficial, Contact Us.