A first-time rental investor gets advice on managing properties across states. Christian Osgood invested up to 3.5 hours from home, then narrowed to 2.5 hours after moving to Texas. In Texas, a non-disclosure state, a property sold for $2.6 million but stays assessed at its 2021 value of $1.9 million.
Chapters
So I guess just to start, I am having my first owner meeting a week from today. So excited about that. Awesome. Yeah, I just got off the phone with the guy and getting some coffee. So basically looking in Metro Detroit area because that's where I live, Michigan. There's not a lot in the terms of like in the areas I'm looking, it's mainly just like Detroit and not something I really want to dive into. Hour and an hour from me, there's like Lansing. It has more opportunities and there's like Toledo, Ohio, and I've noticed some opportunities there. I'm I'm just hesitant doing something like that just because I've never even owned a rental before. I've done some flips. What are your thoughts on— do you think property management is still a good thing to do starting out or doing it yourself, or what are your thoughts?
As far as— so it's kind of a broad question, so I want to answer it as directly as I can. As far as geography, I started 3.5 hours away and it worked really well for me, uh, really, really well. It was doable. It wasn't easy to get to the properties because the other side of the mountains in Washington, so like it wasn't a convenient trip but it was a doable day trip. Um, so that's the radius I did. As I moved to Texas and started a family, I'm like, okay, I want a little bit more time at home. So I narrowed that radius to 2.5-hour radius. That being said, I still own in Washington State, I still own in Texas, so I rely on third-party management in Washington and I self-manage in Texas.
I'm looking at a property in Huntsville. I got with the broker about a number where I think it would start to work for me, and he kind of questioned me on how I got to the number. And one of the reasons I had was the, the, uh, taxes reassessing at purchase. And he was telling me that that property It was actually purchased in '21 for $2.6 million, and the taxes are still assessed at $1.9 million because this is a non-disclosure state. So I have—
so on a technical level, he's not wrong. Non-disclosure states, you tend to have— you tend to get lucky on the reassessment more often than not, uh, because exactly for exactly why, you know, it's a non-disclosure state. You don't have to disclose all the transactional data. That being said, just the act of it changing hands often will trigger reassessment too. And I've seen this happen in Texas several times. I'll buy a property the next year, taxes magically go up. So you always factor for tax adjustment. But you're right, in a non-disclosure state, you may or may not have a significant price adjustment. But what will happen is the appraisal— like, you buy a property, it was publicly listed, they can see the listing price of the thing. It sometimes will play a very significant role in the reappraisal of it. And then in Texas, you'll come in and contest. I assume it's Huntsville, Texas, or Huntsville, Alabama? Texas. Okay, I thought it was Texas. I was making sure.
