Investing in real estate is one of the most reliable ways to build passive income β but you donβt need to live near your investment properties to profit from them.
With strong rental markets like Memphis, Dallas, Cleveland, and St. Louis offering high cash-flow and affordable entry points, more investors are choosing to buy out-of-state rental properties than ever before.
However, remote investing only works when done strategically.
Thatβs where REI America comes in.
This guide explains exactly how out-of-state investors can build long-term, safe, hands-off passive income β without stress, guesswork, or costly mistakes.
Why Out-of-State Investing Is Growing Fast
Many investors are priced out of their local markets.
In cities like Los Angeles, Miami, New York, and Seattle, rental properties often have:
β Low cash flow
β High purchase prices
β Poor cap rates
β Over-saturated neighborhoods
Meanwhile, Midwestern and Southern markets offer:
β Affordable entry prices
β Strong rental demand
β Lower competition
β Better cash-on-cash returns
β Higher ROI potential
This is exactly why cities like Memphis have become top targets for passive-income investors nationwide.
How to Build Passive Income Safely as an Out-of-State Investor
Buying remotely doesnβt have to be risky β if you follow the right steps.
1. Choose the Right Market
A safe out-of-state investment starts with choosing a market that is:
- Landlord-friendly
- Affordable with strong cash-flow potential
- Stable job growth
- Growing population
- Consistent rental demand
Memphis, TN checks every box:
- High rental demand (nearly 50% renter population)
- Affordable homes between $80kβ$150k
- Excellent cash-flow markets
- Strong employment sectors
- Historically steady appreciation
This is why REI America specializes in these high-performing neighborhoods.
2. Buy in Rent-Ready or Turnkey Condition
Out-of-state investors cannot physically monitor renovations daily β so avoid heavy rehab unless you have trusted teams in place.
Turnkey or rent-ready homes offer the safest path to passive income.
Benefits include:
- No renovation delays
- No surprise repair costs
- Immediate rental income
- Predictable investment performance
- Peace of mind for remote investors
REI America acquires, renovates, and delivers homes in tenant-ready condition β saving investors time and risk.
3. Work With a Reliable Local Investment Provider
The biggest risk out-of-state investors face is working with unverified sellers or wholesalers.
A trusted company like REI America solves this by offering:
β Verified property conditions
β In-house renovation teams
β Clear inspection reports
β Market analysis
β Transparent pricing
β Assistance with offers, closing, and property management
Remote investors need eyes on the ground β and thatβs exactly what we provide.
4. Use Professional Property Management
Passive income only stays passive if a strong property management company handles:
- Tenant screening
- Rent collection
- Evictions
- Maintenance
- Property inspections
- Lease renewals
- Accounting and reports
Well-managed properties produce fewer vacancies, better tenants, and more stable returns.
REI America partners with trusted, vetted property managers who specialize in long-distance investor portfolios.
5. Analyze the Numbers (Before You Buy)
Good out-of-state investing means knowing your numbers.
Check:
- Monthly rent
- Cap rate
- Cash-on-cash return
- Estimated maintenance costs
- Vacancy expectations
- Taxes
- Insurance
- Potential appreciation
Smart investors invest using math, not emotions.
At REI America, we provide full ROI breakdowns, rehab scopes, rental comps, and cash-flow analysis for each property β so you always know exactly what youβre buying.
6. Diversify Across Multiple Properties
Instead of buying one expensive property in your city, you can buy multiple cash-flowing homes in an affordable market.
This reduces risk because your income isn’t tied to one tenant or one unit.
Example:
Instead of a $450k condo in California, an investor could buy:
- 4β5 Memphis properties
- With stronger cash flow
- Lower vacancy impact
- Higher long-term ROI
Thatβs how passive income becomes predictable and stable.
7. Protect Your Investment Legally & Financially
To stay safe as a remote investor, always ensure:
β You close using a licensed title company
β You obtain landlord insurance
β You place the property in an LLC (optional for liability)
β You review all inspection and rehab documents
β You use professional contracts
β You keep reserves for emergencies
This creates a legally safe, financially sound investment structure.
8. Build a Long-Term Partnership, Not Just a One-Time Purchase
The safest passive-income investors are those who partner with professionals who:
- Understand the market
- Understand investor goals
- Provide consistent deal flow
- Offer transparent communication
- Deliver quality renovations
- Provide long-term support
REI America is built specifically for this.
We donβt just sell properties β we help investors build long-term portfolios safely and sustainably.
Why REI America Is the Best Partner for Out-of-State Investors
Weβve built our business around one mission:
Helping investors build passive income safely, profitably, and confidently β no matter where they live.
With REI America, you get:
π‘ Rent-ready investment homes
π Full inspections & transparent scopes
π ROI & cash-flow projections
π§ Professional renovations
π Vetted property management partners
π Assistance with LOIs, contracts & closing
π₯ A dedicated team supporting you every step
Out-of-state investing becomes simple when you have the right team in place.