Should you invest away from where you live?

Hi

I'm Tonja Demoff, the title of this post is a question that I'm asked all the time by people who attend my trainings.  The question comes in different forms... should I buy real estate in other countries? What about in a different state from where I live? The answer isn't that simple because it depends... If you are a seasoned investor, understand the risk involved, the headache of property management as an absentee landlord and your up for a challenge you may want to take that leap of faith.

If you are a new investor, never owned property, not even your own home then the answer is NO... NO, NO.... don't do it.  Rule of thumb is if you can't drive to it within 15 -20 min don't do it.  Get some experience, understand the challenges you will be faced with and get a good grasp of the expenses you will have.  Just because another state seems to offer a great rate of return, large cash flow and lower purchase prices doesn't mean you'll make more profit.

Buying out of state can be a wonderful strategy if your going to take the time to visit your property, understand the market and hire a very good management company.

All to often even seasoned investors make the mistake of buying out of state and then the cardinal sin of not visiting their property.  Everyone and anyone can buy a property, someway, somehow and at sometime that doesn't make it a good investment.  Your hard work, diligence to management and staying on top of tenant issues gives you the opportunity to turn your purchase into a solid investment. unfortunately I've watched many people buy things they regret and let's face it nobody likes to admit they made a bad investment so they end up blaming somebody for their so called bad investment and what they may need to do is take a serious look at their lack of attention to their financial matters.

Keep it close to home, visit it and slowly build your nest egg.

Tonja