Is the Real Estate Market overpriced, undervalued or just right?
It turns out the answer is a resounding ALL OF THE ABOVE!!!
It comes down to the type of property and is of course dependent on location. For example, the median home price in New Orleans, LA is $199,000. Contrast that to San Jose, CA where a comparable home will cost nearly six times that number at around $1,200,000.
Now before we all hop in a plane and head down to the Big Easy to purchase some Single-Family-Homes with a side of shrimp etouffee there are two questions people often ask about investing in real estate not in driving distance of their respective homes.
The first question I hear is “Why go out of State?”
Two major benefits include
Do either of these benefits resonate with your personal situation? Suffice it to say, we all have our own reasons for doing what we do.
The second question I often get is, “Is it safe to invest out of state?”
I would argue that the most important answer to this question is the question…
“As compared to what?”
As compared to the stock market? As opposed to sitting idle in cash for 20 years? As opposed to handing it to a mutual fund company betting on international companies you’ve never heard of?
That said, the most obvious pitfalls come from not being able to see the property with your own eyes.
It can be easy to value the property inaccurately as the surrounding neighborhoods are unfamiliar. Compound that with hiring unknown contractors for renovations or maintenance and it’s no wonder folks generally stay away from buying when out of driving distance.
All of these risks can be significantly reduced or eliminated by spending time and energy finding the right market and team that will support you. Let the market do the appreciating and the Property Managers handle the day-to-day. The property itself is the last piece of the puzzle.
Interested in learning more? Schedule a time for us to talk.
I look forward to hearing from you!