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Last Updated: May 14th, 2012 - 22:24:01 |
This seems like an obvious question. As a matter of fact, it seems so obvious you might wonder why it’s even worth asking. Why are you looking to purchase your out-of-state real estate? Why are you looking to purchase a retirement home in Florida, or a resort location in Arizona, or a second vacation home in Oregon? The answer to that question will have a lot to do with developing the rest of your strategy in identifying and making your out-of-state purchase.
If your intention is to purchase something for the purpose of vacation, say you want to go somewhere like Florida for two to four weeks every winter, then the first thing I would question is whether it is worth while purchasing real estate of any form at all. It goes back to the main theme that I will point to and that is, buying real estate that is out of your area is a difficult and risky business even if done with all due diligence. So why engage in such a risky business unless it’s really necessary?
If you are looking to go out of state for just short periods each year, one might argue that if you purchase anything at all, it should be a time share. However, it is my observation that the purchase of a time share is rarely a wise choice. If you go to the location you seek and rent the most expensive hotel suite you can find each year, it wills till end up being a lot less expensive than purchasing the time share.
If your intent in purchasing out-of-state real estate is your relocation, and the establishment of a home for your family or your business, then I think this brings a different set of strategies and issues to your planning.
If your intention is the purchase of a second home where you will reside for a portion of the year (long enough to merit the purchase of property rather than the rental of it) then, of course, this has a different impact on where and what and how you will seek to purchase.
And last, if you are seeking a retirement or pre-retirement purchase, this brings a whole host of other expectations and strategies.
So, first, you must ask yourself why you are seeking out-of-state real estate in order to help answer the questions that follow in making your plan. The second reason to ask “why” is to do a reality check on whether or not what you are doing makes any sense.
If you had a pleasant experience in a resort location and thought of purchasing property there, or if you think that retiring to another location is going to bring you a more pleasant and contented lifestyle, my suggestion is to go and rent in that location for a while before you make nay ultimate decisions. Out-of-state real estate purchases for resort, vacation and/or retirement have the highest rate of resale within the first year or two of purchase than in any other kind of real estate investment. This is due to the fact that decisions are made on impulse and on expectations that are not fully investigated. There is no rush, and my advice to you is to “try on” the area first without a financial commitment before you proceed with your plan of purchasing.
Where?
After you have established that you indeed want to purchase out-of-state real estate and you are sure this is a purchase to which you are committed, then you must pin down the right location where you are seeking to purchase property. Most people at this point have a general idea. They know they want Florida, the southwest United States, southern California, the northwest United States, the Carolinas, or the area referred to as the New South, areas such as Arkansas, Tennessee, and Kentucky.
If you have an area in mind, then your questions start becoming more specific as to exactly in what county or metropolitan are you want.
My main point here is that when identifying location you will want to sped your available vacation time investigating the area by actually going and visiting it. It is my recommendation that you do not bother to look at specific products, developments or real estate, but just go look at the areas. Read the local newspaper and see what is happening and what is available. Look at the Yellow Pages. Get an idea of what religious organizations are there and to a service. Check out the shopping. Go look at the major amenities of the area, whether it be water, mountains, lakes, golf courses, or cultural offerings. If the area offers tours, take the tours. Contact or visit the local Chamber of Commerce and get all the literature on what is available in the area.
Find out what services are available, such as major hospitals and the ratio of doctors to population. Is there a Veterans Administration clinic, if that is pertinent? Is there access to the HMO you belong to? What are the local taxes, both in the county, the city, the town and the state? Try driving some of the major routes at the times you would normally be driving and see what the traffic patterns are like.
Once you have identified an area that you are considering, make sure you visit it more than once and at different times of the year. You can also et weather information and averages from the local Chamber of Commerce. Subscribe to the local newspaper and look at it over a period of time. You’ll get a good idea of the pulse of the community and the community’s philosophical, religious, and political bent, along with the kinds of people who live there, the crime rate, et cetera.
Also, ask yourself how easy or difficult would it be for you, and what is the cost, to travel to those relatives and friends you will be touching base with throughout the course of any given year. This is a lot of work and can take a long time, but it is time well spent.
Lastly, I caution those who feel they have some knowledge of the area they are considering purchasing. If you have vacationed many times in a particular area and feel you know enough about it to make a decision to relocate there. I caution you that sometimes a little knowledge is a dangerous thing. Make sure you understand and know the area beyond that which you have experienced for a short stay in a vacation mode. You must try to get a glimpse of what an area offers you in terms of owning real estate and living there for longer periods than just your vacation. You must pay attention to the issues that will affect you while on vacation, such as property taxes, local income taxes, crime rates, access to medical care, and religious affiliations.
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