Buying Real Estate Out of State

Many people who live in South Carolina own out-of-state property, including vacation homes, rental properties, and other investment properties. Owning real estate can be a worthwhile investment, even if you own property in another state. If you’re thinking of buying real estate out of state, it’s a good idea to research in advance to understand the legal, financial, and logistical implications.

Before You Buy, Hire a Real Estate Lawyer

Mack & Mack Attorneys is an experienced, reputable real estate law firm that handles out-of-state real estate matters. For 85 years, our family law firm has represented South Carolinians. We know the implications of real estate laws in South Carolina and other states for buying out-of-state property.

Primary Purposes for Buying Real Estate Out of State

Many real estate investors understand that diversifying their investment portfolios can help them achieve higher returns. This includes buying real estate out of state. It is especially true in markets with a lower cost of living, which means better property deals. It can also be lucrative in high-demand rental markets, allowing investors to profit from higher-priced markets.

With the rental vacancy rate in South Carolina in 2024 at 10.6%, there are states with a better rental market for property owners, like Connecticut and Maine, with current rental vacancy rates of 2.9% in both. It makes sense why many people in South Carolina looking to invest in profitable markets end up buying real estate out of state.

A real estate attorney can help you weigh the potential for profit against the legal landscape of areas of interest.

Tax Implications for South Carolina Residents

In South Carolina, property taxes are generally administered by the taxpayer’s county of residence. Thus, property owned outside the state is not taxed in South Carolina. However, you will need to pay taxes on that property to the state in which it is located. Another way to look at it is that the state won’t tax you on something you’ve already paid taxes on elsewhere.

The South Carolina Department of Revenue recognizes that many residents have unique tax circumstances. To avoid double taxation, you must file a request for a tax credit for out-of-state properties. A real estate attorney can advise you on how to complete this request and help facilitate that action for you.

It’s a good idea to hire a real estate lawyer to ensure you’re in compliance with state and local tax requirements regarding property you own in another state.

How a Real Estate Attorney Can Help When Buying Real Estate Out of State

As mentioned, a real estate attorney can be a great resource for anyone considering buying real estate outside of South Carolina. In addition to providing invaluable legal advice on matters such as tax implications, legal compliance, and market analysis, they can also provide the legal services necessary for out-of-state real estate purchases. Some of these are listed below:

• Drafting and reviewing closing documents
• Composing a new title
• Explaining contract details
• Representing you in the event of legal troubles
• Helping if unexpected trouble with tax issues or other state laws arises

Another way an attorney can be helpful is by comparing the tax laws of other states of interest with those of South Carolina. Because state tax laws can vary significantly from one state to another, it’s in your interest to know the most economical options for paying taxes on both properties. This includes not only property tax but also income tax on your investment project.

Why Choose Us?

Mack & Mack Attorneys is a knowledgeable source for legal advice regarding buying real estate out of state. We are well-established as one of the oldest continuously operating law firms in South Carolina. Our history of representing countless real estate cases has made our firm a comprehensive arsenal of lawyers ready for anything. When you choose us, there is no better option.

FAQs

Q: ​Is It Smart to Buy Property Out of State?

A: Buying property out of state can be a smart and lucrative move given the right circumstances. Taking advantage of lower housing costs in markets with lower prices but high rental demand can be leveraged to build a diversified portfolio that includes not only varying types of investments but also holdings in various locations and states.

Q: What Is the 50% Rule in Real Estate?

A: The 50% rule in real estate is a rough estimate that real estate investors often use when deciding whether to buy a property. It can be used by buyers considering buying property in another state. The rule states that 50% of gross rental property income goes to operating expenses, excluding mortgage payments.  Here, operating expenses encompass taxes, maintenance, insurance, and periods of vacancy.

Q: ​Can I Buy Real Estate in Another State?

A: Yes, anyone can buy real estate in another state from their primary state of residence. Before making a large out-of-state investment, you should discuss the opportunity with a qualified real estate attorney. This can help you determine whether the purchase is a sound investment and provide insight into the state laws where the property is located and how they may affect you as a property owner.

Q: ​How Do You Buy Out-of-State Real Estate?

A: Buying out-of-state real estate should be the result of a thoughtful process that analyzes various factors associated with a particular property for sale. First, studying the local area market can reveal market pricing trends, applicable real estate laws, vacancy rates, and other details. This information can then be used to determine if the opportunity is advantageous. A real estate attorney can be a great resource for legal advice regarding local market data.

Connect With a Reliable South Carolina Real Estate Law Firm

Talking to a real estate attorney about the advantages of owning real estate in a particular area is a great idea. This is especially true if you need legal advice to help you make the smartest investment possible. Contact Mack & Mack Attorneys to learn more about buying real estate out of state.