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Buying a house in another state.

Resident of FL moving to NY but wanting to buy a FL home as an investment. I currently have a job in FL and have been saving up to buy a home. The opportunity to move to NY for work has come up, and I'm highly contemplating it, but I know I cannot afford to buy any property in NY yet. I still REALLY want to buy a home in FL and rent it out to college students (I live in a college town) or any potential residents. I'm asking if this is a wise decision? Is there alot of red tape that comes w this? Should I just keep the money I'm saving for a home as security for my big move? I don't have to make any big decision till summer, but I want to get a head start. I'm more than happy to provide more details, so please let me know if this is too vague.
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December 08 2013 - Tallahassee
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Answers (7)

There are too many variable, but the thing to consider is this: the market is picking back up so you are buying at a relatively low point. The rates are still extremely low, so another good reason to buy. What are your current tax write offs? The investment property could help you with that. How else would you use your money to invest? Would shelling out 20-25% of the purchase price put you in a financial "pickle" further down the road.
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January 06
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Great! Thanks Joseph and Brian! I still would like more feedback from anyone reading this. Especially if you've done this yourself, or are a lender who have seen some bad experiences with investment properties.
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December 09 2013
Another important thing to consider is the lending side of an investment property. Usually second homes and investment properties are riskier for lenders to fund. In order to balance out the risk there is a higher required down payment and interest rates. In other words, although rates are still historically low, don't expect investment property rates to be the same as primary property rates. Either way, I suggest you speak with a lender like myself who would be glad to speak with you to help you get the loan that you need if you still are considering an investment property. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
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December 09 2013
I am a long distance landlord. I used to live in Chicago and still own rentals there. Being long distance is bitter sweet for me. I am able to purchase properties for much cheaper there than I could here, hence earn a higher cash flow. However that cash flow comes with some level of frustration. Property management is not an easy industry. And it is not easy to find a company that will treat your property as well as you would treat it. It sounds like you will be able to purchase at a lower price down here than in New York. As long as your margins make sense and the cash flow is there I think it could work out for you. My advice if you do decide to move ahead is to buy while you still have some months down here so you can get all of your ducks in a row before you head North. The last thing you want is to have to fly back down here before you're settled in up there. Make sure you have a reserve fund to cover vacancies and repairs. And expect your first year to be a big learning curve so get as much advice from somebody with experience as you can. Good luck.
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December 09 2013
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Wetdawgs: I'm so eager to buy a home in FL, because I know the property here is so affordable. I know the market will go up eventually, so I want to take advantage of the low mortgage rates. 1. I wouldn't mind being a LD landlord, but I would more than likely hire a property manager, even w the cost. I think their rate is worth not having the additional stress. (Thanks, cnrtool1!) 2. I wanted to gear towards college students, bc I know no matter how bad the economy gets, there will always be students. If I rent it out to 2 or 3 of them, I'd be sure they each have a guarantor so I won't get hustled; however, I know I'm not impervious to it. If not students then family would be ideal. 3. Not all my money would be in FL. I already have friends who live in NY, who have been trying to get me up there for the longest, so I have options for roommates if I wanted. I know I'd probably not make much money from the FL house, but the thought of having a place paying for itself sounds too good to pass up. I know I still have to think of property tax and homeowners insurance, which of course I'll look into for the house I chose, if I decide to go through w this. Thanks so much for reading! I hope to continue to get excellent feedback from my post!
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December 08 2013
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I am a Florida resident, and own 3 houses out of state, in a town with a major university. I dont think I have ever had a student tenant, however it may be different if I owned an apartment or duplex.
I have a management company that charges 10% and I do virtually nothing.

It can be done.
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December 08 2013
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You say "I still REALLY want to buy a home in FL".    Why do you REALLY want to do so?   

There are several aspects to consider:

1.  Do you really want to be a long distance landlord?   It is tough, even with a good property manager (plan on 8 to 10% of the rent to property management).

2. College students are not the easiest rental population, although graduate students can be good tenants.   College students have faster turn over (so more expense to the landlord), roommates switch around, and often the summer month issue is a point of contention (they don't want to pay rent, you want rent).

3.  If your money is all tied up in Florida, will you be able to live as you wish in NY?

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December 08 2013
 
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