Investing in Out-of-State Real Estate

Buying real estate rarely goes smoothly, and buying property out-of-state has even more potential challenges. If you are planning on renting property out-of-state, there are similar challenges involved.  However, either are entirely manageable if the potential trouble areas are planned for and addressed.  Many people rent and own property out-of-state, and you can too. 

Also, whether you decide to buy a property or rent it, let’s just call it what it is: Controlling the Property.  Whether you rent or own, you are “controlling” the property in order to run a Short-Term Rental Business out of it and you must be able to “control” the use of that property within the eyes of the law.

Reasons for Buying Out-of-State Real Estate

There are several reasons why you might consider owning or renting a property in another state. Maybe local real estate prices are simply too high...

SHOW NOTES & LESSONS

OVER 5 MILLION PEOPLE HAVE LEFT CALIFORNIA NOW DUBBED "THE CALIFORNIA EXODUS"

Although people are moving into the state while others are moving out, Cali has still lost more than 1 million people and the population continues to shrink.

Who's moving in?

Those making $200,000 plus per year with higher education from tax-burdened states like New Jersey, New York, and Illinois (also seeing massive Exoduses).

Who's moving out?

Those making $55,000 and below with no college education.

Where are they moving to?

States with much more affordable housing like Texas, Arizona, Nevada, and Oregon.

CALIFORNIA HAS 5 OF THE TOP 10 MOST EXPENSIVE RENTAL MARKETS

What a One Bedroom Rents for in:

Los Angeles $2249 month

San Francisco $3400 month

Las Vegas $925 month

Phoenix $945 month

What a Two Bedroom Rents for in:

Los Angeles $3200 month

San Francisco $4500 month

Las Vegas $1122 month

Phoenix $1137 month

...

SHOW NOTES & LESSONS

COMPARE INCOMES FROM A SHORT TERM RENTAL TO A LONG TERM RENTAL

2 Bed/1 Bath

Long Term Rental

1 Year Lease

$1200 month

2 Bed/1 Bath

Short Term Rental

Daily Rate

$87 per night

82% occupancy

$2140.20 month

2 Bed/1 Bath

Short Term Rental

Airbnb's Weekly

10% Discount

$609 for 7 days

-$60.90 discount

$548.10 per week

rent out 3 times

$1644.30 per month

A Loss of $495.90 mo

or $5950.80 per year

2 Bed/1 Bath

Short Term Rental

Airbnb's Monthly 

28% Discount

$2610 for 30 days

-$730.80 discount

$1879.20 per mo

 100% occupancy for

$1879.20 per month

A Loss of $261.00 mo

or $3132 per year

Use Vacancy Instead

Short Term Rental

Our Monthly 

18% Discount

$2610 for 30 days

-$469.80 discount

$2140.20 per mo

Same as your original Single Day!

WHERE DO I FIND MY PER DAY RATE AND OCCUPANCY RATE?

If you've been a host more than a year, use last year's numbers.

If you haven't been a host for a year yet, then use...

SHOW NOTES & LESSONS

Sole Proprietor vs LLC Liability

Issues for the Sole Proprietor or Single-Member LLC

Insurance to Cover Liabilities

Protecting Real Estate through Multiple LLCs 

How many rentals in each LLC?

Looking at the Big Picture

Estate Planning Issues

Protecting your Assets through a Trust

Every State Law is Different

Every Foreign Country Law is Different

Every State Taxing Authority has Different Rules and Regulations

Every Foreign Country has Different Tax Laws

Can a Trust own the LLC (or Corporation or Partnership)?

Understanding State and Foreign Country Probate Laws

Avoiding Probate with Trusts

USA Reporting Requirements for your Ownership of Foreign Real Estate

Get This Episode's Show Notes in a pdf form...

Go To Our Download Page 

Show Transcript

[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave...

SHOW NOTES & LESSONS

Advantages of the LLC

Especially in Real Estate Investments and International Real Estate Investing, there are countless advantages of investing through legal entities.

Other types of Legal Entities that Protect Assets

Multi-series LLCs Corporations

For-Profit Partnerships

General and Limited Non-Profit Corporations and Charitable Organizations

Trusts 

Living Trusts

Asset Protection Trusts

International Trusts

Get This Episode's Show Notes in a pdf form...

Go To Our Download Page 

Show Transcript

[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income, is your host, best selling author and Speaker, Michelle Russell.

[00:21] Hi, this is Michelle, the Master of Money Mindset, and you are listening to the Short Term Rental Revenue Podcast...

...

SHOW NOTES & LESSONS

Limited Liability Company (LLC)

What is a Limited Liability Company?

How is it formed?

How is it taxed?

Who can be a member of the LLC What is a disregarded entity?

Single member LLC vs two or more members

Why do you need an Operating Agreement for your LLC?

Liability in the LLC Funding the LLC

How much funding

Capital contributions

Loans

IRAs

How to open a bank account for the LLC

Get This Episode's Show Notes in a pdf form...

Go To Our Download Page 

Show Transcript

[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income, is your host, best selling author and Speaker, Michelle Russell.

[00:21] Hi, this is Michelle, the Master of Money Mindset, and you are listening to the Short Term Rental Revenue Podcast...

Speaker 1: (00:27)
and in today's podcast...

SHOW NOTES (and downloadable PDF)

LINKS to SITES

You're getting a free audiobook!  Click to try Audible Free for 30 Days and discover the power behind reading a book a month (or more!).  With audible, it's easy!  Try Audible now, using our affiliate link, and you will get your first book right now for free!  After that, you can pay by credit or purchase a membership.  With a membership, you get 1 audiobook and 2 Audible Originals each month for only $14.95 per month.  Michelle has been a member of Audible since 2006 and says it's her secret for reading so many books.

Village Impact, formally known as World Teacher Aid, is a Canadian charity dedicated to bringing education to students in rural areas of Kenya.  The American chapter works through the publishing company, Hay House.  Yes, THE Hay House!  Marianne Williamson, Wayne Dyer, Mike Dooley, and Louise Hay - that Hay House!

AFFILIATE LINKS

DOWNLOADS 

...

Find out more about Maria and her training at Real Estate Profit System.  You can pick up her free guide, The 7 Powerful Steps to Finding Motivated Sellers, there.  Also, remember to send Maria an email and ask her to register you in her free Webinar series coming up in January.

Find out more and register for our "Plan Your Portfolio Webinar," January 10, 2019, at 7 pm Arizona Time here.  

 Here is the book and audio book, as well as the Cashflow Game, that Michelle referenced in today's podcast. Note, these are Affiliate Links.  Plus, you can try Audible for 30-Days Free and get your first audiobook free.  After that, you can pay by credit or purchase a membership.  With a membership, you get 1 audiobook and 2 Audible Originals each month for only $14.95 per month.

 [00:00] Over the last two centuries nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how...