Rental Property Investor · Portland, OR · Member since 2018 · 73 posts · 24 votes
Hello,
I am going to be investing out of state for my first rental property. What's the best way to go about renovating a property when I can't physically be there? Should I hire a property management company first so they can let the contractors into the house?
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@David Kuhlke I have had the best success when I have a property manager and a separate company renovating. The interests are well aligned in that case as the construction company knows there is over site, and the PM is working for you. I have several out of state investors who have done renovations locally here in Berwyn or Cicero, and I have always offered to drop in to check the work at the back end to make sure it was done right. Even good contractors miss things, and if someone is checking the work they will come back and touch things up that would have gone unnoticed otherwise.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@David Kuhlke I have had the best success when I have a property manager and a separate company renovating. The interests are well aligned in that case as the construction company knows there is over site, and the PM is working for you. I have several out of state investors who have done renovations locally here in Berwyn or Cicero, and I have always offered to drop in to check the work at the back end to make sure it was done right. Even good contractors miss things, and if someone is checking the work they will come back and touch things up that would have gone unnoticed otherwise.
Rental Property Investor · Portland, OR · Member since 2018 · 73 posts · 24 votes
7y
Thanks @John Warren for the info! In your experience are most property managers ok with the initial renovation period of a property and to take the time to make sure the work is being done right and on time?
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@David Kuhlke I have yet to use a PM when I am renovating a property, so I am not sure I can comment as accurately as some on here. I know I decided to self manage the Berwyn project I am doing now as most of the management companies have some sort of a mark up for vacant unit. Many of them also charge a GC fee when you are doing a major construction project on top of the GC you would be hiring anyways.
I don't think PM companies are all bad, but at the end of the day, I still believe that I am the one that is the most invested in making my money grow.
@David Kuhlke I have yet to use a PM when I am renovating a property, so I am not sure I can comment as accurately as some on here. I know I decided to self manage the Berwyn project I am doing now as most of the management companies have some sort of a mark up for vacant unit. Many of them also charge a GC fee when you are doing a major construction project on top of the GC you would be hiring anyways.
I don't think PM companies are all bad, but at the end of the day, I still believe that I am the one that is the most invested in making my money grow.
Thanks, John, for telling me more about your experience. It’s really helping me understand more about the process. I need to dig in and find out more about those GC fees that PM’s charge during renovations.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@David Kuhlke once you get a trusted contractor that can turn a unit, treat them right. I just turned a unit in Indiana while I was here in Illinois doing my regular realtor business/turning apartments here. I have a good contractor in Indiana, and the only thing I had to worry about was a few phone calls from home depot to pay for the material. That is priceless... my PM had nothing to do with the process except they took photos at the end to make sure everything looked good (and no GC fee!)
@David Kuhlke once you get a trusted contractor that can turn a unit, treat them right. I just turned a unit in Indiana while I was here in Illinois doing my regular realtor business/turning apartments here. I have a good contractor in Indiana, and the only thing I had to worry about was a few phone calls from home depot to pay for the material. That is priceless... my PM had nothing to do with the process except they took photos at the end to make sure everything looked good (and no GC fee!)
That is great to hear! I just started reading David Greene's book "Long-Distance Real Estate Investing", and I'm learning that having a great team is vitally important to success. Hopefully I will be able to work with a GC like yours!