Purchasing property - A traveling salesman`s dilemma.

[JonathanH]

Hello,
For the past few years, my wife and I have been traveling from city to city for our business.
We stay in cities anywhere from 1 to 3 months, and then its off to the next place.
We do not have a primary residence, but there are 3-4 cities where we go back to more often than others. I guess you can say we are on the `west coast` and that is as specific as it gets.

We`re lucky in the sense that we are able to put some funds aside, but now we are in a position where we would like to invest those funds into real estate.

Even though I realize there are a lot of hurdles for first time investors, my main concern right now, is that if we purchase anytime within the next 5 years or so, we will always be out of state/province owners.

I understand that I would have to put in a lot of time and research into finding the right property manager, but even with that, does this sound possible? How important is it for first time investors to be in the same city as their properties?


Any feedback appreciated.

All the best

 

[ChrisDavies]

Many people in REIN buy properties outside of where they`re located, including lots of people who buy in Alberta. You have to be willing to (potentially) fly out a couple times a year if you`re self-managing, or end up paying more for a property manager who might not find it worth it to just manage one unit from an owner. There`s lots of people in your situation who choose to do their first couple properties as the money partner in a Joint Venture.

The travelling and lack of a principle residence might make mortgage qualification more difficult. I`m assuming you have a stable address to file tax returns from. Have you checked your credit score lately?

 

[Pheenix]

QUOTE (JonathanH @ Nov 5 2010, 04:07 AM) . . . We do not have a primary residence, but there are 3-4 cities where we go back to more often than others. I guess you can say we are on the `west coast` and that is as specific as it gets.

We`re lucky in the sense that we are able to put some funds aside, but now we are in a position where we would like to invest those funds into real estate.

Hi Jonathan

Sounds like a lifestyle many young people would aspire to, and may be as many semi-retirees!

Either way I would talk to an accountant as you go through the process and maybe a tax lawyer. Specifically whether there would be any advantage to declare `principal residence status` at least on a portion of the property, and what it would take to be able to do so, in your case. There are advantages and disadvantages, and a number of well articulated dos and don`ts. You may find it is not advantageous, but its worth asking.

Good luck

 

[JonathanH]

QUOTE (Pheenix @ Nov 5 2010, 08:16 AM) Hi Jonathan

Sounds like a lifestyle many young people would aspire to, and may be as many semi-retirees!

Either way I would talk to an accountant as you go through the process and maybe a tax lawyer. Specifically whether there would be any advantage to declare `principal residence status` at least on a portion of the property, and what it would take to be able to do so, in your case. There are advantages and disadvantages, and a number of well articulated dos and don`ts. You may find it is not advantageous, but its worth asking.

Good luck


Thanks for the advice guys.

I have spoken with mortgage broker and we will be making the property our primary residence. Our credit is good and it seems we will qualify for the loan we wanted to.

Knowing that, what other things should an out of state/province owner concern them-self with , other than finding a strong property manager?

thanks

 

[JohnS]

QUOTE (JonathanH @ Nov 6 2010, 04:40 PM) Thanks for the advice guys.

I have spoken with mortgage broker and we will be making the property our primary residence. Our credit is good and it seems we will qualify for the loan we wanted to.

Knowing that, what other things should an out of state/province owner concern them-self with , other than finding a strong property manager?

thanks


The first thing, to my mind, is making sure that you`re not playing in the gray zone. If you get financing as if it`s your primary residence, and then rent all of it out as an investment property, wouldn`t that be mortgage fraud?

Have a good one!

JohnS

 

[Thomas Beyer]

QUOTE (JonathanH @ Nov 5 2010, 01:07 AM) ..


Any feedback appreciated.
buy a rental pooled condo (wheer rents are shared across all units) or an apartment building . or with a publcly traded REIT or a private real estate syndicator .. or do a JV with one of the many capable REIN members .. many options !

 

[JonathanH]

QUOTE (JohnS @ Nov 6 2010, 05:22 PM) The first thing, to my mind, is making sure that you`re not playing in the gray zone. If you get financing as if it`s your primary residence, and then rent all of it out as an investment property, wouldn`t that be mortgage fraud?

Have a good one!

JohnS

Yes it would be. So Im not doing that.

Thanks for all the advice everyone.