Buying out-of-state property

Buying out-of-state property

 

We are selling a house right now, and it’s not a normal situation for us. It’s not a flip or a rental property. Instead, it’s the house my Grandmother owned until she passed in 2013.

 

There are some people who are cool with buying and owning property all over the world and back. But that idea is scary to me. I like having properties I can lay eyes on regularly to see if the house is being kept up by the tenants. If I see it needing some work done, I know contractors who can get the job done. I also know the laws where the house is located and can navigate things at the courthouse if I need to. And should I decide to sell it, I have an idea as to what the value of the house will be and what agent to list it with.

 

If I were to own property outside my area, I would not be equipped with any of this knowledge. And because of that fact, that scenario seems very risky to me because I would have to rely on the expertise of people I really don’t know to take care of my property and my money.

 

One of the reasons I like real estate is because of the amount of control you have over your investment. If all else fails in a deal, you have the power to fix the property up and sell it to gain back most — if not all — of your investment.

 

You don’t find that security in the stock market. You have no control of the profitability of a company. So if a stock goes bad, you just lose that money with no recourse. I like the idea of controlling what’s going on with my money. So, to buy out of my area and to rely on others I really don’t know gives me the same feelings as buying a stock.

 

That’s why I don’t go out of my area. But when me family came to me and said they needed help with Grandma Cricket’s property, I was willing to help, but I didn’t like it.

 

You see, at three hours away, my Dad is the closest heir to the property. I have an uncle in Lagrange, Georgia, an aunt in New Jersey and then another aunt who lives just outside of London, England. So, Dad and I will be handling most of the things on the ground.

 

Grandma’s house happens to be located just across the Georgia state line in a little town called Otto in North Carolina. We have a rehab to do, a sale to accomplish and a landlord-tenant situation to resolve. Yay.

 

So, who is the tenant?

 

When my Grandma passed, she granted a friend of hers a life estate, which gave him the privilege of living in the house until he died. He paid no rent, other than upkeep on the house and paying for the property taxes and insurance. He did not gain any equity in the home for such payments nor could he levy any debt against it. He was just a tenant who was granted the use of the home.

 

At the time of his death, the life estate was revoked, and the property was to be taken over by Grandma’s heirs, sold and split between them.

 

He recently passed.

 

Our issue is that he married after moving in and now there’s a person living on the property who the family doesn’t really know. Hence the tenant/landlord situation. In Georgia terms, she would be considered a tenant at will since there was no lease and I would know how to handle things. But I don’t know North Carolina laws.

 

The next obstacle is that when the man died, the insurance policy covering the house became null and void since it was made out to the life estate. I called my insurance man and he couldn’t help because he isn’t licensed in North Carolina.

 

Next, we have no idea what the value of the house is or who is a good agent up there. We can make an educated guess, but Zillow is not a great way to value property.

 

And we haven’t even gotten to trying to hire any contractors yet.

 

All these are just a few of the things you can run into when buying property outside your area. And to me, it’s just too risky.

 

Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.

 

 

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