Category Archives: Saving and Investing

Buying an Investment Property Sight Unseen

house
A little over a year ago, I purchased an investment property in Kansas City, Missouri. I have never been to Kansas City, Missouri. I bought the property sight unseen. I live in New York City and can’t afford rental property in this area so I decided to invest out-of-state where the numbers make more sense. I am a risk averse person and buying something sight unseen sounded crazy. I just didn’t have to time to fly out there to see the property personally. However, ultimately, I determined that me physically going to the location wouldn’t have made that much of a difference. Was it really necessary to drive around the neighborhoods, look at houses, and speak to the staff of company I was looking to purchase my investment from? With the power of the internet, I can research the neighborhoods, look at pictures and videos of the houses, and speak to the staff of the real estate investment company over the phone. I know very little about housing construction and the extent of my home improvement skills is changing a light bulb and hammering a nail into the wall. Yes, it is pretty pathetic. I am much better off in leaving this to the experts.

Here is what I did instead:

First, when choosing someone to work with, I went to the forums of Biggerpockets. There are many people asking for references and a few names consistently came up as being trustworthy. I contacted the people who gave the good reviews and asked them more specific questions about how their investment was going. I googled those companies and checked if there were complaints on BBB. The most important thing when investing (and especially when investing out-of-state) is to trust the person you are working with. And even if you do trust the person, you must always make sure to the best of your ability that what they are saying is true. Trust, but verify!

After narrowing down the companies that had great reviews, I contacted them and asked them more specific questions regarding the investment. If the person I spoke to take forever to reply to e-mails or phone calls or if they sound shady or overly optimistic about their investment, sounding like they were making a sales pitch, I’d be less inclined to work with them. Sure, an in-person meeting may be slightly better way to determine whether one can be trusted, but I don’t think it was absolutely necessary.

Researching the neighborhood and property:

Zillow: This is one of the best tools giving you a good amount of information about the property and neighborhood. It will provide you with a “Zestimate” which is their estimate as to the approximate value of the property. They seem to do a pretty good job estimating how much the property is worth. You can also look at the comparable sales in the neighborhood. There are also ratings for the schools in the neighborhood. Another great tool that Zillow has is their rent zestimate which estimates the amount of rent you can probably get from that property. It is a pretty good estimation but also check out Rentometer, which also gives a rent estimate. Another thing you can do is to call up local property managers and ask them how much rent they think you can charge for that property.

Trulia: It provides similar information to Zillow, but I like using Zillow better. I do like Trulia’s Crime Map which shows the amount of reported crimes in that neighborhood. It also has information about demographics as well as average commute time and businesses in the neighborhood. For more information about crime, SpotCrime is also a good resource. Another great resource with a wealth of information about various neighborhoods is neighborhood scout. (You will have to pay for more advanced data)

The Biggerpockets forum is not just a great place to get recommendations on companies to work with, but it is also a great place to find which neighborhoods you should invest in. There are plenty of helpful people who will tell you what areas to avoid and which areas are a good investment. Also, check out the City Data forum where there are many locals who will provide information about the neighborhood you are looking into. The Biggerpockets forum is geared towards investors whereas the City Data forum seems to be people talking about their neighborhoods generally and helping those who plan on moving there with information. Another way to look at the neighborhood and house without traveling there is to use Google Street View. Of course, these pictures may not be up-to-date but it still gives you a feel for the neighborhood.

Seeing the property- the turnkey company, realtor or whoever it is you are working with will send you pictures and/or videos of the property. If you want to make sure these pictures are accurate, you can hire an independent third-party to take pictures of the property and send it to you. For $69, WeGoLook will send an agent to the property to take some pictures and verify the condition of the property.

Finally, after all this research, I think that an inspection and appraisal of the property adds an extra layer of security. If you are taking a mortgage on the property, the bank won’t want to take the risk of giving you mortgage with a property that is in horrible condition and about to fall apart. The home inspector has no incentive to lie about the condition of the property. Consider using a different home inspector than the one recommended by the turnkey company or realtor you’re working with to ensure there is no conflict of interest.

I’m not saying you should purchase real estate out-of-state without seeing it. If you are able to fly out to see the properties offered, check out the neighborhoods, and talk to the people you will be investing with, it’s a great idea. I’m just saying that it is doable even if you cannot personally go there. Just make sure you do your due diligence. Investing in real estate has risks and investing in a property out-of-state has increased risks, but they can be reduced.

Would you consider buying a property without seeing it? If you’ve done this before, are there any other resources you would recommend using?

Successfully Launch Into Adulthood

after college

A few of my co-workers have mentioned that they are postponing their retirements so they can “help out” their adult children or soon to be adult children. I think it’s great when a parent can lend a helping hand to their children as they transition to being an adult, although teaching them financial skills is often better than just giving them a handout. I also have no problems with a child living at home with their parents as they settle into adulthood, as long as they use that time to improve their financial circumstances by saving and investing their money. But by taking care of every aspect of a child’s financial life, he or she will never learn these important life skills. Here are a few things that one needs to learn financially as they become adults:

Credit Cards

Many people entering adulthood already have credit card debt along with student loan debt. You may think that this is the norm, and it may well be, but don’t treat it as such. Treat it as an emergency! Having high interest credit card debt will set you back financially. If you have credit card debt which was not accrued paying for life essentials like food and shelter or getting to and from work, immediately cease spending on non-essentials until you have paid off that debt. Contrary to what some may say, credit cards are not inherently evil. A credit card is only a tool. If you pay your balance off every month and having a card does not tempt you to spend more than you usually would, it can be a great tool. (If you cannot handle the responsibility of a credit card then I’d definitely recommend using a debit card/cash only) Many smart users of credit cards earn lots of points which can be redeemed for travel or cash. Check out Credit Card Insider which is a great resource for those who want to learn more about credit cards and how to manage them responsibly.

Credit Score

Another important aspect of having a credit card and using it responsibly is that it builds your credit score. Why is a great credit score important? You want to buy a house? You get the best interest rates with a high credit score. Same goes for financing a car. You have student loan debt like many this generation do? You better have an excellent credit score if you want to refinance your student loan to a lower rate. You will only qualify for credit cards with the best bonuses if you have a high credit score. Many employers will also check a prospective employee’s credit score.

Budget or Anti-Budget

So you’re an adult now and you’ve got bills to pay. You’ve got to make sure that you have enough money to cover your expenses. If your expenses exceed your income, then you’ve got a problem. Making a budget probably isn’t much fun and many people scoff at it. However, with many online budgeting sites, like Personal Capitaland Mint, it makes budgeting easy to do. No need to break out your excel sheets and list out all your expenses. I will be honest though, I don’t really budget, but instead I have an “anti-budget,” which is a term coined by Paula Pant who blogs at Afford Anything. I list out my expenses and figure out how much I should be able to save. I make sure I save that amount each month and don’t stress about my spending. Whether you decide to budget or use an “anti-budget” will be determined by your personality.

Live below your means

I remember many of my friends who graduated from college and immediately went on a spending spree. If you have a full-time steady job, you probably have more discretionary income than at any point in your life and it’s tempting to inflate your lifestyle. However, it’s in your best interest to continue living like a college student. Buying a new car, expensive outfits or even buying a house does not make you an adult! Like I said above, if your expenses exceed your income, you’ve got a problem. You’re young and saving for the future may be the furthest thing from your mind, but this is the best time to start saving and investing. The magic of compounding works if you give it time, which is why it is important to start early.

Investing

I was talking to a friend, who is in her 30’s about investing, and she said that her mom handles that for her! And, no, her mother is not an investment advisor. Maybe you don’t have an interest in investing, but it’s in your best interest to learn about it. No one will care more about your money than you do, plus it is something that is important for your future financial health, so you might as well learn about it now. How do you expect to save enough to retire if you don’t have a basic understanding of investing? Living below your means and saving is important, but it is not enough! You want to make your money work for you. Stuffing it underneath your mattress won’t earn you anything. Neither will putting all of it in a savings account earning less than 1%. Spend a few hours learning about investing by reading the Bogleheads website or JL Collins’ stock investing series.

Quick Tip: When it comes to paying bills and investing/saving, make it automatic. It makes life easier. When it comes to bills, you won’t worry about late payments. As to investing and saving, it’s a great way to pay yourself first so you avoid the temptation of spending it. It is also a great way to get into the habit of saving and investing. However, make sure to review your statements to make sure everything is correct.

Cooking

Wait, I thought we were only talking about finances? Cooking is an important life skill, and it can also save you a lot of money. Cooking your own food at home is not only more affordable, but it is healthier. Cooking is not rocket science, if I can do it, pretty much anyone can too.

Learn skills

Just because you’re out of college, doesn’t mean you should stop learning. Learning life skills is important, but so is learning skills that will help you advance in your career. Learning new skills is very convenient as you can do it online using Coursera or Udemy. For certain courses, you may be able to receive a certification as well.

Side Hustle

You’re already working a full-time job, who wants another job? Maybe you want to earn some extra cash to build up your savings or pay off debt. Employees are expendable these days so it’s a good idea to have another source of income. Also, having a side hustle might feed your entrepreneurial spirit or passion and possibly replace your full-time income. Having a side job is a lot more flexible nowadays and often will not require you to take a job with set hours. Here’s a list from The College Investor of 50 ways to make a side income. You can also check out a few more ideas from David Carlson who runs the blog Young Adult Money as well as his book Hustle Away Debt: Eliminate Your Debt by Making More Money.

What other financial skills should young adults learn as they transition into adulthood?

Mind-blowing Ideas Found Reading Blogs

credit: Freedigitalphotos.net

credit: Freedigitalphotos.net


Even before I started my own blog, I was a blog reading addict (mostly personal finance blogs). I’ve learned so many great things and gotten so many ideas from reading blogs, which include ideas that the main stream media often don’t talk about. I was tired of reading the recycled articles about making a budget and contributing to your 401K up to the employer match. I didn’t want to read any more stories about how early retirement was almost impossible (and by early they meant 50’s) and that even retiring at 65 might be a pipe dream. Here are some of the amazing things that I’ve learned thus far:

Retire in your 30’s

I always thought that, like most people, you get a job, work for 40 some odd years and retire in your 60s. I thought I was doing an awesome job saving for retirement when I opened an IRA account and increased my 401K contribution over the amount that my employer matched. Since I was working in government where I had a pension, I started thinking that retirement at 55 would be possible and thought that was incredibly awesome. Now when I stumbled upon the Early Retirement Extreme blog where the blogger, Jacob, said that he retired after working 5 years and was not yet 30, my mind was blown. He was a little extreme with his frugality, but then through Jacob’s blog, I found Mr. Money Mustache and his story really made me think that early retirement was possible. He went into detail about how he and his wife retired early, and argued that early retirement didn’t mean a life of deprivation, explaining often that he lives a very fulfilling life. I’m not going to be able to retire in my 30’s, but it’s possible I get there in my 40’s.

Simple, Stress-free Investing with Superior Results

I have talked about index investing many times on my blog. I believe in it and I am glad that I found this strategy. It wasn’t always this way though. Like many others, I used to chase returns by trying to a hit run by investing in the next hot stock and by investing in mutual funds which had the best returns. Now I realize that it is difficult if not impossible to consistently beat the market, so I just stick with low-cost index funds. Warren Buffet has encouraged most investors to just invest in low-cost index funds and I’m going to take his advice. This investment approach has also reduced my stress. The market drops a few hundred points! There’s a recession coming! Britain is exiting the EU! I’m investing for the long haul and I don’t really care about the stock market fluctuations. I continue to invest and stay the course. I’m not exactly sure when I first learned about index investing but it was likely on the Bogleheads’ forum.

Don’t Pay Taxes

You know how the saying goes that “there are only two guarantees in life: Death and Taxes.” Well, what if you could pay very little or no taxes? Wait wait wait, I’m not saying you should be like Wesley Snipes and get convicted of tax evasion. There are legitimate ways for regular working Joes to shelter our money from taxes. When I read the blog post title $150,000 Income, $150 Income Tax and Never Pay Taxes Again, I was very interested. We often hear about maximizing our returns when investing, but most times we ignored tax savings. Taxes are boring and complicated. Nobody really wants to deal with them. Heck, most people I know have no idea about their own taxes! They send their tax documents to the accountant who files the taxes for them. The tax policy in the US targets people with earned income so if you reduce your taxable income by “making your take home pay as small as possible,” you can avoid paying a good amount of taxes. Justin who blogs at Root of Good and wrote the post about paying only $150 in income tax with a $150,000 income, suggests that “you do everything you can to make your take home pay as small as possible” by maxing out tax advantaged plans like Retirement plan contributions (401k, 457 or 403b plans), flexible spending accounts, health savings accounts, and others. I’m pretty sure that after I read this post, I immediately logged onto my 457 plan online and maxed out my contributions.

The post about never paying taxes again was found on the Go Curry Cracker blog and it gave four simple rules to eliminate taxes:

◾Choose leisure over labor
◾Live well for less
◾Leverage ROTH IRA Conversions
◾Harvest Capital Losses AND Capital Gains

I’m especially a fan of choosing leisure over labor to eliminate taxes. That’s a win win! This advice is geared more towards those seeking or near early retirement, which is what I often dream about.

Out-of-State Real Estate Investing

I always wanted to invest in real estate but it didn’t seem possible because real estate was so expensive in the area where I lived. When I read that the blogger FI Fighter, who also lived in a high-cost-of-living-area, invested in real estate in states where the prices made more sense and where the properties would cash flow, I was very intrigued. I was somewhat skeptical at first but after some due diligence and research, I jumped in and also purchased a rental property out-of-state.

Travel for Free

I used to focus on earning cash back on my credit cards. When I read bloggers write about earning travel points on credit cards and going to exotic locations for nearly free with points, I didn’t really pay much attention because I always figured it was just too good to be true. There was a catch, right? However, after I read more and more stories of people were doing it, I was of course, interested to see if I could get in on it too. After learning some of the “tricks of the trade” with travel hacking, I’ve been able to score some free flights and have stayed at hotels (some pretty luxurious ones) for pretty much free. If you are someone who overspends with a credit card, travel hacking is not a good idea. If you are disciplined with your spending and are an organized person, you can definitely take advantage of travel hacking. I think I first started reading about travel hacking on the Flyertalk forums, but the information can get pretty technical and it might be intimidating to newbies. I think from that forum, I found the Million Mile Secrets blog which is a great resource for those interested in pursuing this. If you want to learn more about this area, there is even a free online course about the topic on Travel Miles 101. If you want even more hand holding, you can contact Holly from Club Thrifty with your ideal itinerary and she will help you create a “credit card rewards-fueled plan that can make your travel dreams come true”

You Can Really Make Money Online!

I always thought that there was an opportunity to make money online but I didn’t know how, plus I am not the least bit technically inclined. Reading articles where bloggers reveal how much money they earn online really opened my eyes to the opportunities out there. Check out the income reports on Club Thrifty and Making Sense of Cents and tell me you don’t want to learn more about this possibility. I definitely am and will need to learn more about how to earn some money online! The best thing about making money online is that you can be often work from anywhere and your schedule is a lot more flexible. Also, if you do it right, a lot of the income can be passive.

Drastically Reduce the Cost of Your Cellphone Service

I was in a family plan with AT&T and had an employer discount. I thought that was the best that I could do. There was no other way to reduce this expense unless I went with some unknown network which was probably unreliable. Then I read Is Your Cellphone Plan Ripping You Off? on the Saving the Crumbs blog and I knew that I could saved a lot of money by switching. Being that Cricket Wireless uses AT&T’s network, I figured there was no downside to the switch. With Cricket Wireless’ family plan, you can have 5 smartphones with unlimited talk and text and 2.5 gigs of data (after which your data speeds are reduced) for $100. That is less than half of what you would pay if you had a similar plan on AT&T. So why wouldn’t I switch? I’ve also heard great things about other plans like Republic Wireless and Ting which are a lot more affordable that the traditional plans, but I haven’t tried them. If you’re interested, you can check out the review on Republic Wireless here, and the review on Ting here.

Consider an Adjustable Rate Mortgage
When I was purchasing a co-op, I went to the bank and the loan consultant just assumed that I was looking for a 30 year fixed mortgage. I didn’t know any better and after the housing crash in 2007, there was such a stigma with adjustable rate mortgages that I just assumed that a fixed mortgage was superior. I truly regret not doing more research about this because I would have saved a lot of money if I didn’t go with conventional advice. When I read Financial Samurai’s post, 30-Year Fixed Mortgage Loan or an Adjustable Rate Mortgage (ARM)?, I knew I made a costly mistake. Here is an excerpt of what he had to say:

“First of all, the average duration one lives in and owns a home is 7 years. If that’s the case, what on earth are you doing borrowing a 30-year fixed rate mortgage for? A 23 year + overestimation of ownership is a serious miscalculation based on the statistics at hand. With a 5/1 ARM, your underestimation is only 2 years, but you already have baked that in”

We bought a co-op which is a junior 4 (small dining alcove converted into a small bedroom). Being that our family was growing, it was very likely that we’d outgrow the apartment in 5 to 7 years. I did run the “rent vs buy” calculator and given other factors, I think it made sense to buy a co-op even given this timeline. But it made no sense to get a 30-year fixed mortgage. If I had gotten a 5/1 ARM, I’d reduce my interest rate by 1% saving over a thousand dollars a year. *Face Palm*

Do you see anything here you might implement in your life? Have you read anything tips or ideas on other blogs that was really mind-blowing? If so, please share in the comments!

Investing: So Easy A Dead Person Can Do It.

Philippine-stock-market-board

In a previous post, I said that when it comes to investing, it is better to be lazy and cheap. More specifically, I argued that low cost index funds worked best and that you should have a “hands off” approach, ignoring the daily ups and downs of the stock market. Apparently, I didn’t go far enough and the best investing style is not “lazy and cheap” but “dead and forgetful.” You see, Fidelity did a study of their accounts to determine which investors performed the best. They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.

Basically, what this study from Fidelity teaches us is that we should keep our hands off investment accounts. The best investors did nothing and were of course not buying and selling. Too often, we think that we can time the market and buy and sell based on our analysis. We’re usually wrong. Not only are we wrong, but buying and selling stocks will often increase transaction costs and is tax inefficient.

Back before I was mainly an index investor, I also tried chasing stock returns. In the spring of 2000 while I was still in college, I remember there being this internet stock craze. Everyone was making money investing in dot-com companies. Everybody thought they were experts because every stock they bought went up. I begged my father to help me open a stock trading account and to help fund a portion of the account. Unfortunately for me, I decided to join this frenzy exactly when the dot-com bubble was about to burst and lost half of the money in that portfolio. My timing was impeccable.

In the mid 2000s, I purchased shares of stock in Starbucks. I mean Starbucks was everywhere, they were expanding quickly and everybody was buying Starbucks coffee. People would joke that you could open a Starbucks store within a Starbucks store and that store would still be profitable. After the 2008 recession, I sold all my shares of that stock at a loss when stocks were tanking and the economy was in the midst of a terrible recession, thinking that most people would shun $5 lattes with money being so tight. A bull market took place not too long after I sold the stock and the price of that stock has more than tripled from the price I sold it at. I could list many more instances where I lost money on buying individual stocks, but this post will run too long! I have also made money on individual stocks, but the losses outweigh my gains.

Maybe you’re just a horrible stock picker. Why don’t I just invest with the pros?

I’m sure many readers may be thinking that, and yes, it is very likely that I am bad at picking stocks. But is entrusting your money to the professionals the best alternative? In 2007, Warren Buffet made a bet of $1,000,000 with a collection of five hedge funds of funds chosen by New York-based Protégé Partners (the winner to donate the money to charity). Buffet bet that a low-fee index fund would beat the expensive hedge fund chosen by Protégé Partners over 10 years. Buffet invested in Vanguard’s 500 index fund which is an index fund that tracks the S&P 500. During the first four years of the bet, Buffet was trailing the hedge fund managers, but has since pulled ahead…WAY AHEAD. At the most recent Berkshire Hathaway shareholding meeting, he revealed that The group of hedge funds are up a cumulative 22 percent, while the S&P 500 has advanced close to 66 percent. He admitted that it wasn’t that the hedge fund managers were bad at picking stocks, it was just that the fees charged by the hedge fund are so high it drastically cuts into the returns. On the other hand, index funds, especially Vanguard’s index funds, have very low fees.

Let me share a few quotes from Buffet which I found fascinating:

“There’s been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities.”

To really drive home his point, he referred to two investment managers employed by Berkshire Hathaway, and said that they each manage $9 billion of the company’s money, and that if they were compensated as much as hedge fund managers usually are, “they’d be getting $180 million each merely for breathing.”

Buffet also said:

“By periodically investing in an index fund… the know-nothing investor can actually outperform most investment professionals. Paradoxically, when ‘dumb’ money acknowledges its limitations, it ceases to be dumb.”

And one last quote, not from Buffett but from Princeton professor Burton Malkiel, who wrote in his book, A Random Walk Down Wall Street:

“A blindfolded monkey throwing darts at a newspaper’s financial pages could beat most experts,”

Resources I recommend if you want to learn more about index investing:

Go to the Bogleheads wikipage which is investing advice inspired by Jack Bogle, creator of index funds. You can also check out the Bogleheads book:

I also recommend reading the Stock Series on Jim Collins’ personal finance blog or get his recently published book:

Are you afraid of investing in the stock market? Do you invest in index funds?

I Bought an Out-of-State Investment Property

house

Living in New York City, I always thought it would be hard to buy a house because they are so expensive, so instead we purchased a co-op which is much more affordable. I was always interested in real estate investing, but I used to immediately think that it would be IMPOSSIBLE! I couldn’t even afford to buy a house to live in, how was I going to buy one as an investment property? I considered buying a co-op to rent out, but there are often very strict rules about renting so I scratched that idea off. I started reading the Biggerpockets forum which is a great resource for those interested in investing in real estate. When the topic of how to invest in real estate when you live in an expensive area came up, a member of that forum suggested that you look a little farther away from where you live. I work outside of NYC so I looked into that area. While the properties were more affordable, the property taxes were very high and ultimately, the numbers just didn’t make sense. Then I read an option that just might work: invest in an out-of-state turnkey property.

First, what is a turnkey property?

Basically, a turnkey property is a house that has been fully renovated and is ready to be rented out. The company that sells this turnkey property usually also manages the property for the investor. The goal is for the management company to handle the day-to-day operations of the property, it takes a fee, and you, the investor gets to sit back and have the remainder of the rent sent to you.

But aren’t you scared to buy a property out-of-state?

This is the most asked question when I tell them that I bought an out-of-state rental property. As a matter of fact, I bought it sight unseen. You often hear about real estate investment scams and buying a property out-of-state would make most people feel uneasy. Even after learning about such opportunities, I took a lot of time to learn more about it and do my due diligence before jumping in. I read reviews about various turnkey companies and read the BiggerPockets forums to find people who had invested with those companies. I contacted those investors and asked them how their experience was. When I heard positive reviews from other investors, it put me at ease. I used Google maps, Neighborhood Scout and Zillow/Trulia to look at pictures of the property as well as other information. More specifically, I looked at the crime in that area, the school ratings and what Zillow/Trulia estimates the property to be worth. (This is just a starting point. Don’t just rely on information on these sites) I also figure that since there will be an appraisal and an inspection done on the property, there are some safeguards from a company selling you a dump that no one in their right mind would rent.

Where did I end up buying my out-of-state property?

Initially, I wanted to buy in an area where I at least knew someone living there so that they could check on it if I felt the company which was managing the property was doing something shady. I looked into the Buffalo area because it seemed the properties would cash flow and there has been a lot investment by the state to revitalize the city. However, after contacting a few companies, I didn’t feel too comfortable with them as they were not too great with communicating with me. Also, one company offered me a property in a not so great part of town and I wasn’t interested in being a slumlord. Then, I narrowed down the cities that I thought would make sense and came up with Indianapolis, Memphis, and Kansas City, Missouri based on the economy and employment rates as well as other factors. After contacting the companies and asking other investors their honest take about them, I ended up choosing a company in Kansas City.

While the company I chose to work with sold turnkey properties, they also had a hybrid approach. With turnkey properties, the company will usually buy a distressed property at a low price, make renovations to it and sell it to the investor at retail price. Nothing really wrong with that. It is a business and they need to make money too. Just make sure it’s a fair price. The hybrid approach that the company I worked with used was a little different in that the investor would purchase the distressed property, the company would manage the renovation (for a fee), and then rent it out. I decided that since buying the property at a lower price would give me some built in equity in the property from the start, it might be a better investment.

How is it going?

I bought the property about one year ago. It was a foreclosure and my offer of $60,000 was accepted. I took out a mortgage as well as a rehab loan. The rehab cost about $12,000 so the total price of the rehabbed property was $72,000 and the appraisal of the property came to $83,000. After it was renovated, it was rented out in September 2015 for $850 a month and the tenant has paid timely each month. Some maintenance issues have popped up since I purchased the property, however, I am still confident that it will turn out to be a good investment.

I am still very much a novice when it comes to investing in real estate so I didn’t go too in-depth into the more technical aspects of real estate investing. However, I wanted to write about my experience so others who thought they would never be able to invest in real estate because their local housing prices were so high, know that there are opportunities available in other parts of the country and that it’s possible to invest out-of-state. I also understand that there is always risk whenever you invest in real estate, especially when it is out-of-state. So if you are interested in going this route, make very sure that you do your due diligence. Also, check out the resources below. I read a lot of the following blogs and forums from other more experienced real estate investors when I decided to invest.

Resources for those who are interested in investing in out-of-state rental property

I think the first blog I read which talked about investing in out-of-state rentals was Fi Fighter. He laid out a clear and reasoned explanation as to why he chose this route and why he thought it was a good investment. There are a bunch of valuable posts about this topic, but I highly recommend Why I Invest in Turnkey Properties, and How to Quickly Evaluate a Real Estate Deal: The 1% Rule

Paula Pant who blogs at Afford Anything also has a lot of posts relating to real estate investing. She doesn’t focus on turnkey investing but she does write about managing her rental properties from “around the globe.” She has a fantastic post answering the most frequently asked questions about real estate investing, she has monthly income reports, and recently launched a course about this topic.

Another excellent resource is the Biggerpockets website (I mentioned the forum earlier), however they also have a free beginner’s guide to investing, podcasts, blog, calculators and a plethora of other useful tools at your disposal.

For those interested in turnkey properties, you can check out Turnkey reviews, and you can also get a free e-book about that topic there. It’s a good starting point to find companies that seem to do a good job, but I haven’t seen any negative reviews so I try to take the reviews with a grain of salt.

Lastly, I have been following the Cash Flow Diaries blog as the blogger writes about his turnkey real estate investments and is very transparent about the price, expenses, etc, relating to his investments. An excellent post for beginners interesting in investing in turnkey properties is his post A Step by Step Guide: How to Buy a Turnkey Rental Property.

Have you invested in out-of-state rental properties and how has it gone? If not, would you consider this investment option?