Read Time: 5 Minutes
2/8/2025
Why Buy Real Estate in Another State?
Real estate is one of the greatest investment’s you can make, but as Harold Samuel reminds us, “There are three things that matter in property: location, location, location.”
Good real estate isn’t always found in your backyard. The best deals might force you to buy homes in another state.
Buying a house in another state can be a great way to find better deals, grow your investment portfolio, and take advantage of markets that work in your favor.
Maybe homes cost too much in your area, or maybe another state has better rental income, lower taxes, or stronger job growth.
But investing in a different state is not as simple as buying a home where you live.
You need to research markets carefully, understand local rules, and find people you trust to help you manage the property.
In this guide, we’ll walk through 7 key steps to help you buy a house in another state—without making costly mistakes.
Step 1: Pick the Right State to Invest In
The first step in out-of-state investing is choosing the right market. Not all states are great for real estate investors, so start by researching these three things:
1. Home Prices
If your goal is to make money renting out your home, you’ll want to look for states where home prices are lower, but rental demand is high.
- More affordable states: Ohio, Indiana, Alabama, Missouri.
- More expensive states: California, Washington, Massachusetts.
2. Landlord & Tenant Laws
Some states make it easier for landlords to rent properties, while others have strict tenant protections that could make it harder to manage an investment.
- Landlord-friendly states: Iowa, Kansas, Idaho, Kentucky.
- Tenant-friendly states: California, New York, Oregon.
Step 2: Find the Right Neighborhood
After picking a state, the next step is choosing a specific city and neighborhood. Some areas have high rental demand and growing home values, while others may struggle with high crime or low job opportunities.
How to Find the Right Neighborhood in a Different State
At BrightInvestor, we always say, “To pick a good neighborhood, you need to do a market RECAP.”
This simple method helps investors focus on five key factors that make a market stable and great for investing:
- Rent – Are rental prices high enough to cover your costs and provide cash flow? (Check: Rentometer)
- Employment – Are jobs growing, and are people moving to the area for work? (Check: Bureau of Labor Statistics)
- Crime – Is the neighborhood safe enough to attract tenants? How much risk do you want? (Check: CrimeOmeter)
- Appreciation – Are home values increasing over time? (Check: Realtor.com Market Trends)
- Population – Is the city growing, or are people leaving? (Check: U.S. Census Bureau)
Instead of searching all these sites separately, you can use BrightInvestor which brings together all of this data in one place. You can compare multiple markets in minutes and even use the in-app Google Street View to explore neighborhoods remotely.
Step 3: Build a Local Real Estate Team
Since you’re buying a rental property property in a different state and won’t be living nearby, you’ll need a team of people you trust to help you through the buying process.
Who You Need on Your Team
- Real Estate Agent – Find an investor-friendly agent who knows the local market.
- Property Manager – If you’re renting the home out, consider hiring a property manager to handle tenants, maintenance, and rent collection. You can also use software like RentRedi or TurboTenant if you prefer managing it yourself.
- Home Inspector & Contractor – Since you can’t visit the home, you need an inspector to check for hidden problems and a contractor for repairs.
- Insurance Provider – Get insurance quotes from Steadily, which works nationwide and is fully integrated into BrightInvestor’s property research dashboard.
Step 4: Get Pre-Approved for a Loan
When buying a house in a different state, it’s a good idea to get pre-approved for a mortgage before looking at properties.
Some lenders have rules against financing out-of-state investment properties, so make sure to find one that works in your target state.
What to Consider in Your Budget:
- Down payment – Most investment properties require 20-25% down, but this number can vary depending on your lender and goals.
- Closing costs – Loan fees, home inspections, and title insurance.
- Property management – If hiring a property manager, expect to pay 8-12% of the monthly rent.
Step 5: Find & Analyze Properties Remotely
Once your financing is in place, it’s time to start looking at homes.
Since you won’t be able to tour them in person, use virtual tools and rely on your local team.
How to Analyze Properties from a Distance:
- Request video walkthroughs – Ask your agent for a live video tour.
- Compare local home prices – Use BrightInvestor or Zillow to check property values.
- Check property history – See past listings and sales data to avoid overpaying.
- Review inspection reports – Always hire a professional to inspect the home before buying.
- Run the Numbers – Like every deal, never skip out on calculating the profitability of your investment.
Step 6: Make an Offer & Close the Deal
Once you’ve found a property, work with your real estate agent to make an offer.
Since you’re buying a house in a different state, be sure to include these protections:
- Inspection contingency – Lets you back out if the inspection reveals major problems.
- Financing contingency – Ensures you’re not locked in if your loan falls through.
- Remote closing option – Most states allow e-notary services, so you can sign paperwork from anywhere. Popular options include DocuSign or Notarize for digital signatures.
Step 7: Manage Your Property from Afar
After closing, you need a plan to manage your out-of-state property from a distance.
If you don’t want to handle day-to-day tasks, hiring a property management team is a great option.
If you prefer to manage it yourself, use:
- RentRedi or TurboTenant for online rent collection.
- Security cameras and smart locks for remote access and tenant monitoring (note: ensure you only install security cameras where privacy laws are followed).
Final Thoughts: Is Buying Out of State Worth It?
Buying a house in a different state can be a great way to find better deals, increase your cash flow, and build wealth in strong real estate markets that you could not have otherwise enjoyed.
But the key to success is choosing the right state and neighborhood—and using the right data to guide your decisions.
There’s dozens of websites out there to grab this data so you can buy in different states with confidence.
However, going to each data provider separately can take incredibly long and often be costly.
So instead of wasting hours going to multiple websites, BrightInvestor helps you research markets quickly by combining 20+ into one!
👉 Start researching out-of-state markets today by signing up for your BrightInvestor account here!