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I'm trying to learn more about the various opportunities in different states, and thought this would be a great place to get feedback from other investors in other areas. Currently, my husband and I own rentals in CA and AZ, and are considering other areas now too. Having never lived outside of CA, though, we're limited in our knowledge of other states.
Based on things like property taxes, legal climate (aka, how "friendly" the state is to landlords or tenants), overall potential for profit based on availability of properties and current rents, income taxes, extra costs (snow removal, rental tax, etc.), and so on, what states do you think are the best and worst for investing in? For example, CA is widely regarded as very regulated and tough to evict a tenant, moderate property taxes (unless they repeal that part of Prop 13), higher income taxes, etc. AZ is much more landlord-friendly (quick to evict, lower regulations), low property taxes, low income taxes, etc. As such, my husband and I think AZ is much better to invest in than CA.
So what other states are good for investing, in your opinion? If you were looking to buy another property to invest in, what state(s) would you be considering? I realize different investors value issues differently, and that this is a vague and open-ended question, so I'd love to hear lots of opinions. Thanks!
I just landed a condo in Bullhead City, but I was about 2000 apart on a condo in PDX. Very tight rental market in PDX, and no a/c nightmares, and great transit. High taxes, and tenant friendliness are turnoffs, and they now only pick up the garbage every two weeks....yikes! I found Alamogordo NM to be very intriging, but it seemed like everything was in a flood risk area.
Architecturally, I thought Pueblo, Colorado had the most to offer for a small amount of cash. Beautiful turn of the century Victorians for 45K. Very good upside. Charm City (Baltimore) is so cheap, you would think there was a typhoid epidemic, especially with its proximity to the very pricey DC Market. It's worse than that, though. It's sky high taxes, bad schools, and high crime. I liked a nice TH with Bay view for 24,900. Value my life, though. Love the weather in Rio Rico AZ, but you need to feel comfortable around spanish speakers. 85648. Or Nogales, even more so. The climate is so much better than Phoenix, and there are many law enforcement near the border, so robberies are quite rare. 85621. All of it would have better ratios than anywhere in California, which seems to be in a self-inflicted downward spiral.
Oregon used to be tenant/ landlord neutral with the laws, but laws are being changed to favor the tenants a little too much.
Rents are low in relationship to the price of buying. Tenants used to be reliable and honest, but a lot of human scum has moved into Oregon, so tenant selection has gotten a lot more difficult.
I think property taxes are high, but not so much when I go looking at other states to see what taxes they are paying. I pay $1600 a year for the same value house that gets taxed $4,000 in Texas.
Texas, on the other hand, gets high rents in relationship to the cost of property and the landlord tenant laws make it easier on the landlord.
I was looking in Washington, too. Consistently very high HOA fees, which are probably a result of earthquake insurance premiums. No higher than CA. No income tax is offset by very high property taxes. Still beats CA, by a lot.
Washington has no personal income tax which can be of great benefit for those without a lot of income...
Property tax can be the wildcard because individual property taxes are really not constrained... about 8 years ago I posted about a home with an 80% jump in assessed value over the price paid 18 months prior...
An entire neighborhood was impacted because a California investor paid an outlandish price for land with the intention of development... which turned out to be impossible... Never the less, the neighbors were soaked with a huge tax spike for several years and the property was eventually foreclosed and values stabilized.
Real Estate has highs and lows and plenty of California Property owners have made money...
Last year Bay Area prices were up over 30% in one year... some areas more.
Also, Property Tax in California is more predictable thanks to Prop 13...
We are not necessarily looking for appreciation, more for regular monthly income producing good ROI.
As for Prop 13, the Dems are trying to get rid of that for non-owner occupied since they now have a super majority here. Frightening.
Regardless, I agree that owning near where you live is best, as creeksitter said. We actually plan on leaving this ridiculous state in a few years, have not decided for sure which state but CO seems fairly pro-business, and has skiing and no hurricanes and few tornadoes. I have been looking at rentals there. Maybe we will buy one there, anticipating living near it in the future. That is part of why I started this thread, trying to learn more about other states.
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