In this video, we talk through the 6 biggest reasons to invest in rental property out of state. While investing in rental properties close to home can be a great thing, there are so many successful real estate investors who have a portfolio of both in-state and out-of state rental properties.

There are a number of reasons you should invest out of state. A lot of the reasons listed below are obstacle for beginners who are looking for their first rental property, but in this video we outline how to avoid these issues to begin building your rental property portfolio as a real estate investor.

Watch the video for the full breakdown of the reasons previewed below and some other helpful tips!

6 Top Reasons to Invest Out of State

1. Property in your area is way too expensive. This is especially true for many people who live in the Northeast, California, or other urban areas where property values are super high. If this is true for you, then you should definitely consider investing out of state in an area where rental properties are much more affordable.

2. Restrictive laws for investors and landlords in your area. Do research on the laws in your area to make sure they won't be a hindrance to you. Landlord/investor friendly laws include things like no rental control, low property taxes, less restrictions on deposits, and an easier eviction process. Any one of these issues can be a huge hindrance to you in your investment process, and can eat away at a lot of your income. A bad tenant that is hard to evict can even end up costing you thousands of dollars and months of your time in damage repairs, court appearances and paperwork. This can take a toll on any investor.

3. Better returns on rental property out of state. If your mortgage, property taxes, and other expenses are much higher in your state, these expenses will quickly eat into your income and ruin your bottom line. Improve your returns by looking for affordable rental properties that are in areas with moderate property taxes and don't require a lot of maintenance. This may mean you will have to look out of state from where you live.

4. Better long term growth opportunities out of state. Like all investments, the goal should be to maximize your rental property investment over the long-term. There may not be a lot of long-term growth opportunities in your area. You want to find areas with good appreciation, and population growth. Watch the video to find out why.

5. Diversification. Diversifying your real estate portfolio is one of the best ways to protect your investment, as with any investment. By investing out of state, you are diversifying where your properties are at and ensuring you are not putting all your eggs (home) in one basket (city or state). That way if something were to happen that affects that region, you have other safe investments that can help keep your real estate portfolio afloat.

6. And lastly, low opportunities for your specific type of investing. If you are really just interested in Airbnbs, your town may not have a lot of consumer traffic, or it may not be a tourist destination. Because of that, you'll want to look out of state to an area that does meet these criteria, to find a better rental property for Airbnb.
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