Skip To Content
    This post has not been vetted or endorsed by BuzzFeed's editorial staff. BuzzFeed Community is a place where anyone can create a post or quiz. Try making your own!

    Analyzing A City When Investing Out-Of-State

    If you think that $600k is a huge price for an average home with 3 bedrooms and 2 baths, you can forget about investing in multifamily house.

    Being a beginner in the real estate, you will be pretty discouraged to look at the prices of real estate, especially when you are intending buy a home in another state or a city located afar.

    With that said, I would like to say that getting discouraged with the prices doesn’t help here. Investing at a distant property has some huge benefits that are worth the struggles that you may face while managing that property.

    I consider this a bonus benefit that you are required to take diligence process into the account pretty seriously while managing a property at a distance. Investors need to keep their legal side safer, and managing property at a distance trains you for it.

    Picking a city and knowing about its economic outlook

    It could be the strategy or choice about a city that you are going to pick. After choosing the city that you would like to invest in, there are a few things that you would need to consider on the first priority. These factors help you determine the economic outlook of that city and you will be able to determine whether or not your investment is going to be a safe bet. The factors are job growth, crime unemployment, source of income, industries, information about demographics and the future plans.

    What an investor should try to ensue is that there is economic stability in the city and, thus, the investment goals are not hard to achieve.

    Comprehensive Annual Financial Report

    Comprehensive Annual Financial Report, also known as CAFR, is a document that consists of financial statements by government. The CAFR of a city is prepared by the city’s authorities and then it audited by a third party accounting firm.

    Let’s suppose you are willing to invest in a property that is located at a beach. You like the location and you see a potential in that area. However, you then find out that the city, with which the beach is associated, has a depressed financial status. At this stage, you can turn away from making such investment because you don’t want to waste your hard earn money by making an investment that could give you losses.

    The way you can find out that city has depressed status is to analyze CAFR report. There are three sections of a CAFR report; i.e. introductory section, financial section and statistical section. All three sections are fully detailed and provide complete elaboration from all aspects. Based on this information, you can easily predict or estimate the scenario after you make investment. Hence, you will be in a better position to understand whether or not you are going to get good return after investment.

    Create your own post!

    This post was created by a member of the BuzzFeed Community.You can join and make your own posts and quizzes.

    Sign up to create your first post!