Maybe you’ve been priced out of your local housing market. Or maybe you’ve found an incredible opportunity across the country that’s too good to pass up. Whatever your reason, investing in real estate from out of state is more doable than ever before.
Technology, remote teams, and property management services have made it possible to buy, manage, and grow a portfolio in another city without ever stepping foot on the property. But like any smart investment strategy, long-distance real estate investing requires planning and partnerships.
If you’re thinking about becoming a long-distance landlord, here are some helpful tips to make it work.
1. Choose Your Market Carefully
When you’re investing in your own backyard, you probably have an instinctive sense of what’s desirable — which neighborhoods are growing, what rents go for, and where the good schools are. But when you’re looking out of state, you can’t rely on gut feelings. You have to lean on data.
Start by researching markets that fit your investment goals. Are you looking for cash flow or long-term appreciation? For cash flow, focus on areas with affordable housing prices and stable rent demand. For appreciation, look for regions with strong job growth, infrastructure investment, and rising population trends.
Pay attention to key metrics like:
- Median home prices vs. average rents (to calculate potential return)
- Local property taxes and insurance costs
- Economic diversity — is the local economy built on one industry or several?
- Vacancy rates and average days on market
Cities in the Southeast, Midwest, and parts of Texas have become hot spots for out-of-state investors because of their combination of affordability and rental demand. But every market has nuances, so do your homework before diving in.
2. Build a Trusted Local Team
The biggest challenge of being an out-of-state investor is distance — you can’t just pop by to check on repairs or interview tenants in person. That’s why having a strong, reliable team on the ground is essential.
At a minimum, you’ll need:
- A local real estate agent or broker who knows investment properties, not just primary homes. They can help you identify undervalued listings and negotiate deals.
- An experienced property manager who can oversee day-to-day operations, from maintenance and rent collection to tenant screening and emergencies.
- A contractor or handyman for quick repairs and property upkeep.
- A local inspector to thoroughly evaluate properties before you buy.
- A CPA or real estate attorney familiar with state-specific tax and landlord laws.
When you hire a property manager, you’re essentially gaining a partner who helps protect your investment while you’re miles away. They handle everything from marketing vacancies to coordinating repairs and communicating with tenants.
Perhaps the biggest benefit is knowing your property is handled professionally. You can step back with confidence, knowing the property is being maintained and your tenants are cared for.
3. Don’t Skimp on Due Diligence
When you’re buying property in a city you don’t live in, due diligence becomes your safety net. Every assumption you make should be backed by data, inspections, and documentation.
- Get a full inspection report — not just a summary. You’ll want to know exactly what you’re buying and whether repairs are cosmetic or structural.
- Run the numbers thoroughly and factor in property management fees (typically 8 to 10 percent of rent), maintenance reserves, vacancy periods, and travel expenses if you plan to visit occasionally.
- Review rental comps to confirm projected income is realistic. Overestimating rent is a common mistake for new investors.
- Research local laws, as every state/city has different landlord-tenant rules, licensing requirements, eviction processes, etc.
The more legwork you do upfront, the fewer surprises you’ll face later. You can pick when you do the heavy lifting. It’s better to do it up front so that you don’t have to deal with the headaches later on down the road.
4. Use Technology to Stay Connected
Thanks to modern tools, managing from afar is easier than ever. Video tours, electronic leases, and cloud-based bookkeeping software allow you to handle almost everything remotely.
Ask your property manager to use systems that give you real-time visibility into what’s happening with your property. Many platforms offer owner portals where you can see maintenance requests, track expenses, and download monthly statements.
5. Visit at Least Once
While it’s entirely possible to buy and manage property without ever visiting, seeing your investment in person — at least once — can offer valuable perspective. You’ll get a feel for the neighborhood, confirm what the listing photos don’t show, and meet some of the people managing your property face-to-face.
If you’re expanding your portfolio, visiting multiple properties during one trip can also help you identify patterns — what’s typical for the area and what stands out as a potential red flag or opportunity.
6. Treat It Like a Business, Not a Hobby
Out-of-state investing requires organization and professionalism. This isn’t something you can manage casually between meetings or on the weekends.
Treat your rental property like a business, meaning:
- Keep detailed financial records.
- Separate your property income and expenses from personal finances.
- Stay in regular contact with your property manager.
- Revisit your performance metrics quarterly to ensure the investment is meeting your goals.
You don’t need to micromanage, but you should always know how your investment is performing.
Start Small and Scale Up
If this is your first time investing from out of state, start with one property. Get to know the process and how everything works.
Once you’ve gained confidence and your first property is running smoothly, scaling becomes much easier. By then, you’ll have systems and relationships in place that make managing multiple properties efficient and low-stress.
The most successful long-distance investors build gradually, learning from each experience and improving their process along the way. There’s no reason you shouldn’t do the same.
