An out-of-state investor buying Bay Area property faces a few extra logistics that a local buyer doesn’t — touring homes remotely, closing without being physically present, and managing a property from a distance. None of these are dealbreakers, but they do mean leaning more heavily on a trusted local team than you might if you were buying near where you live.
Touring and closing from a distance
Video walkthroughs and detailed photos can substitute for an in-person tour for an initial look, though it’s worth having someone you trust view a property in person before you write an offer, whether that’s your agent or a trusted friend or family member. Closing logistics vary — some documents can be signed remotely or notarized electronically depending on the title company and lender, while others may require a mobile notary to meet you wherever you are. Ask your agent and title company early which parts of your specific closing can happen remotely.
Managing from a distance
Most out-of-state investors hire a property manager rather than self-managing, simply because day-to-day issues need someone local who can respond quickly. See Self-Managing vs Property Manager for how to evaluate that decision and what to look for in a local manager.
California tax filing as a non-resident
Owning rental property in California generally creates a California-source income tax filing obligation even if you live in another state. See the California Franchise Tax Board’s guidance for nonresidents and part-year residents for the state filing basics, and talk to a tax professional familiar with multi-state filings, since your home state’s rules interact with California’s in ways that are easy to get wrong without help.
Running the numbers before you commit
Use Cap Rate and Cash Flow Basics to evaluate any property, and see Financing Investment Property for loan options, some of which have specific considerations for non-resident borrowers.
Return to the Investing in Bay Area Real Estate guide for the rest of the investing topics.
Building your local team before you shop
An out-of-state investor is generally better served lining up an agent, a property manager, and a tax professional before starting a serious search, rather than after finding a property. Having this team in place means you can move quickly when the right property comes up, and you’ll have local eyes and expertise to lean on for questions that come up during due diligence — something that’s much harder to arrange under time pressure once you’re already in contract.
Also selling a property from a distance?
If you’re an out-of-state owner considering a sale instead, get a free estimate at the Home Value Estimator and see the Seller’s Guide for how a remote sale process typically works.
This page is general information, not tax or legal advice. Multi-state tax filing requirements and remote closing procedures vary — consult a tax professional and your title company about specifics for your situation.
Laxmi Penupothula · Intero Real Estate · DRE #02047105 · Serving Fremont, Milpitas, San Jose, Santa Clara, Union City & Newark. Equal Housing Opportunity.