tyler asked:


I live in Phoenix, which according to CNN/Money List is a 41.9% overvalued market.

http://money.cnn.com/2006/03/13/real_estate/overvalued_housing_markets/

But looking at the list, I see there are many areas (like Dallas, TX) which are still quite undervalued. I figure it would be a good investment to buy property in those areas. I can get a 10% CAP Rate investing in Texas, which is a great rate and makes me think I can’t go wrong. (I could never find that kind of return in Phoenix or California).

So my question: do you think investing in out of state real estate, in “undervalued” areas is a good idea? Or should I avoid real estate altogether since we are entering an uncertain market?

If there are any experienced investors out there, please chime in with your thoughts. Thanks!

Susan

3 Responses to “Out of state real estate investing - good idea or not?”

1. thebigm57 on March 21st, 2008 8:30 am

   RE is always a good investment provided there is minimal negative cash flow. In other words if your rental income on the investment just covers the mortgage and property taxes than it’s a good deal otherwise stear clear. Regardless of tax benefits money out of pocket is money out of pocket. Also don’t get fancy thinking I can milk it for a few years by using 0 down and an ARM cause you’ll end up loosing $$$.

2. Piffle on March 24th, 2008 6:37 am

   get free real estate!

3. deano on March 25th, 2008 11:27 am

   The future is uncertain for the small stuff.