Landlording & Rental Properties

What Moving Out of State is Teaching Me About Remotely Managing Rentals

Expertise: Mortgages & Creative Financing, Personal Development, Landlording & Rental Properties, Personal Finance, Real Estate News & Commentary, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Business Management, Commercial Real Estate
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So, I literally feel like a vagrant nowadays. I am never in one place.

I am writing this while sitting in the vestibule of a Kumon center in Columbus, Ohio, waiting for my kids. You might think, Columbus, why Columbus? Well, I am not allowed in my home in Lima at the moment.

Stop it! Patrisha did not kick me out. I am not like that. I am well trained, and I behave. Besides, the alternative, I heard, is way too expensive. 🙂

So, no, that’s not why I am not living at home. You see, I’ve got my house on the market, and to help things along, I’ve had it staged. And, well, we can’t live there with the staging in place.

So, we are one foot in Arizona. And the other foot is all over. A couple of weeks with my parents in Columbus, a couple of weeks on Kelleys Island, and I seriously don’t know where I’ll be next week. And for a Russky, who, as they say, doesn’t typically take a piss without a plan, this is all just a little naughty.

So, When Is the Big Moving Date?

Frankly, the sooner the better. As I mentioned, as of two weeks ago, my primary is on the market. It would be nice to have that sold, though I don’t think that’s in the cards. And I don’t care too much.

However, I am also looking to sell one of my apartment buildings (in fact, I am in contract on it), and I’m definitely waiting to close on that prior to moving. Things are moving along, so I hope within the month.


Why I Chose This Building to Sell

There is a specific way we all chose to think about what we do in this sport. My thought process is not too much of a secret, in that I believe you have to manage your own units, and because of this, a high priority to me is the quality of the asset. Buy the wrong asset, and you will kill yourself trying to make people behave.

We throw this word around a lot — systematize. But, what does this actually mean?! Well, after I sell this building, I will still be leaving 20+ units in Lima, which I will have to manage from Arizona. And throughout the process of readying for this, I am really crystallizing my thinking around what it really means to systematize.

Related: The Investor’s Complete Guide for Hiring a Trustworthy Out-Of-State Contractor

And, of course, I am selling this building — and not another — precisely because unlike everything else in my portfolio, it doesn’t lend itself to systematizing.


This is not meant to be an advertisement for the Buildium (to learn more about Buildium, click here) platform, but this is what underpins my system. When my wife and I realized we would need to relocate our family around the middle of 2014, two things happened. One, I stopped buying more property in Ohio because I didn’t want to complicate my life with re-positioning of new assets. And two, I realized that we needed to streamline our management infrastructure.

In my search of a good tool, I talked to my good friends Brandon Turner and Serge S. Brandon offered to snail-mail to me some napkins and postcards — napkins to keep my financials straight and postcards for tenant notices — he said his system works wonderfully!

I passed. 😉

Serge pointed me toward Buildium. I had been using Quickbooks, which worked because we have three other companies on QB, but we always had to cut corners to accommodate real estate. And now, with Buildium, all of the rental applications are handled online, all of the leases are signed online, all of the tenant payments are handled online through their portal, all of the financials and reporting is online, and all of the showings are a function of a lockbox on the door. In other words, I ain’t got to be there for nothin’ — just my speed!


The Importance of Systematizing

The systematized approach I described is how I handle all of my units, aside for the ones I am selling. The tenants in this building are on fixed income, many are retirees, and most wouldn’t know what to do with a computer even if I handed one to them. They are wonderful people, and they pay rent every month — by putting the check into a slitted mailbox on the wall. But the internet is just hard.

Related: The Ultimate Guide to Adding Systems & Outsourcing to Work Less in Real Estate

In fact, one of the tenants asked me why I am choosing to sell her building but not the rest of my buildings, and when I explained that if I were to keep this building, she would have to start paying rent on her computer, she flat out said, “Oh no.”

Interestingly, this is one of my most stable buildings. The same attributes of the tenant profile that make it non-systematizable also make it easy to manage locally. The rents are not as high, but they are stable, people don’t move too much, and the economic losses are very controllable. With that in mind, I am sorry to let this one go, but I just couldn’t figure out a way to manage it long-distance.

Your Lesson for Today

I’ve been teaching people to buy “the right kind of buildings.” Throughout this transition, I’ve added another stroke to the picture of what that building looks like, which is this:

If you know you'll get paid, but you've got to drive to pick up the check, you need to realize that you will need to be a local landlord. If this works for you, fine. But if your roots are not necessarily so strong in a particular location, then perhaps this building, as wonderful as it may be, is not for you.

Just today, I spoke to a student who now has six units, and he told me that while he uses Buildium to track rents, he still drives to do showings and sign leases. Why? Because the tenants in his buildings struggle online. Good, old Midwest.

Arizona, here I come!

Do you own out-of-state rentals? What systems do you use to manage them remotely?

Let’s talk in the comments section below.

Ben has been investing in multifamily residential real estate for over a decade. An expert in creative financing, he has been a guest on numerous real estate-related podcasts, including the
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    Logan Hassinger Specialist from Fort Worth, TX
    Replied about 4 years ago
    When I took over a four plex last year from an old school landlord/investor, he did the same; drive over, collect and head home. On the first day of my ownership I went door to door, introduced myself and informed them that buildium was going to be used. All tenants gave a sigh of relief and were more than willing to make online payments. I’ve officially systematized this property and it’s on to the next one.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    You’re learning 🙂
    Sharon Vornholt from Goshen, KY
    Replied about 4 years ago
    Great article Ben. You are moving pretty far away. I’m curious – why Arizona? I’m keeping my fingers crossed you sell ASAP. Sharon
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    Sharon – good question with a long answer: I needed to move; this much was clear. And this reality was very much teed up by 3 things, in this order: 1. Kid’s education 2. Ease of living (better education, organic food, medical opportunites within shorter distance) 3. Better RE opportunities for me 4. Good weather (when you get to be my age, you’ll understand 🙂 We considered NC (Charlotte) and AZ. AZ happens to be better set up in terms of #1 and #2 on my list. And, I believe I can do well enough at #3 as well. And, Charlotte, in terms of property values and taxes, is very high for what it is in my opinion. So – gonna go hang with my buddy Serge S. in AZ… Thanks indeed, Sharon!
    Kim Banks Investor from Savannah, GA
    Replied about 4 years ago
    If you are interested in selling sub-2, I am interested in buying. Please feel free to contact me. Great post, and good luck with the move!
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    Haha – Nice! I’ll keep that in mind.
    Scott Trench President of BiggerPockets from Denver, CO
    Replied about 4 years ago
    So I totally agree with the point that you often have to manage real estate yourself to realize large economic gains over time. I believe that these economic gains are exaggerated in markets where cap rates are lower, and that your IRR on this property, managed remotely, will diminish rapidly over the next few years. I’d be doing exactly what you are doing in your position, but with the intention of exiting all of my remote holdings over the next decade and swapping out the equity for larger properties closer to where I live. Do you plan to do something like that, or do you see yourself holding onto properties in Lima long term?
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    Scott – the plan is 3-5 years, not 10. I’ve got equity tied up in Ohio that needs to come out to AZ sooner than 10 years from now.
    Steve Vaughan Rental Property Investor from East Wenatchee, WA
    Replied about 4 years ago
    Love the tips anf that you’ll still be self-managing, Ben. Here’s hoping your sales and move go smoothly for ya!
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    I’ll drink to that, Steve!!!
    Mike McKinzie Investor from Westminster, CO
    Replied about 4 years ago
    Here I am, sitting in Goodyear, AZ, and chuckling while I read this. The reason I am chuckling is that this week I am closing a sell side in Colorado, a buy side in Missouri, a new tenant moving in, in Visalia, CA and another new tenant moving in, in Texas. Why am I in Goodyear? A very good friend of ours was diagnosed with stage 3 throat cancer and he started Chemo and Radiation yesterday at The Cancer Treatment Centers of America here. My time, effort and energy is better used supporting my friend than showing a rental or attending a closing. Ben, while you are anti Property Manager, there will come a time when you will see that life has way to much to offer and your time is too valuable to babysit real estate. Besides. If you are using Buildium and/or have staff that work for you, you already have a form of Property Management in place. Plus, it is always a great feeling to graduate from landlord to Real Estate Investor!!
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 4 years ago
    So sorry to hear, Mike!!! I completely agree – it’s not the best use of my time to babysit property. And yes, since I have Buildium and people on the ground, I do have a management system — just not a 3rd party management company… None of this shit matters in light of the things that are truly important, Mike! Agreed 🙁
    Mike McKinzie Investor from Westminster, CO
    Replied about 4 years ago
    And you are right about the medical care in AZ. The Cancer Centers of America facility here in Goodyear is above AWESOME!
    Richard Harrington Investor from Bellevue, Nebraska
    Replied about 4 years ago
    I just use a property manager in Nebraska and I now live on Tucson. He takes 9% and takes care of everything. I have a home warranty service for the bigger issues that may come up. I am clearing my mortgage/PM/warranty by about $300. Are there better ways to do it? Probably; I am passive when it comes to this property.
    Mike Palmer from Utah
    Replied about 4 years ago
    Ben: How do you handle showings–you are not driving there to show, do you have someone local that does this for you? For a fee? Can you share any details of how you handle showings remotely?
    Mike Palmer from Utah
    Replied about 4 years ago
    Everything else seems to be easy to do remotely, but curious about how you handle the showings.
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied about 4 years ago
    Has anyone come across a Buildium-type program aimed more at single family/smaller landlords? Buildium looks like a good paperwork-solver for large landlords at $100/mos for up to 100 properties, but 1 property at $45/mos + $100 set-up fee per tenant it’s a largish chunk of the profit for what would for me be basically a rent-receiving service.
    Jerome Kaidor Investor from Hayward, California
    Replied about 4 years ago
    Remote management? If your complex is big enough to hire a staff, your tenants don’t have to be computer savvy. I have been remote managing a complex in Fresno for 13 years. I wrote my own webapp. It runs on my central server. Staff has logins. Tenants pay the onsite staff, the staff books rents into my system. Twice a month they go to the bank. All they have is an endorsement stamp. They don’t even have an ATM card. They fax me the complete deposit data – lists of who paid cash, and pictures of the checks. They also point & click to issue custom 3day notices to pay rent I have a 888 number for tenants and prospectives to call me. It only works during business hours. My app also tracks maintenance. It helps with the payroll – organizing everything up into Schedule E categories. It helps me check out prospective tenants. Lately, I have been getting into telephones. Wherever a telephone number appears, it is a button. When I left click on the button, it calls the number for me. If, OTOH I right click, up pops a window that lets me send a text message to that number. I can also send an announcement to the entire complex – well, everybody who has a cell phone – with a few clicks. I even wrote a module to send rental receipts as texts. Click on the item, up pops a window with pre-made text – Thank you for your payment etc. Whenever a task gets onerous, I try to automate it. My webapp got the bimonthly payroll from an 8-hour ordeal down to an easy hour and a half.