New to Real Estate · Ogden, UT · Member since 2017 · 23 posts · 29 votes
If I hire a management company and want to be very hands off, what challenges does having property out of state present that investing locally does not?
Real Estate Agent · Member since 2019 · 285 posts · 149 votes
6y
@Zach Simpson I would say the biggest issue is not being able to drive by and visit the property every now and then. That becomes much more challenging when it requires significant travel, you're putting a lot of trust in the team you hire when you give them 100% of the responsibility. Personally I would find it hard to believe that a PM is screening tenants at the same level I would be. If you're new to investing it's extremely helpful to learn the process first hand, not to mention you're typically less familiar with the local laws, market and economic conditions.
Investor · Leander, TX · Member since 2016 · 299 posts · 402 votes
6y
Being local, some repairs and jobs that are needed on the property you could DIY and save a ton.
Not seeing the property in person you may miss some important details that if you had known, you would have put in preventable measures that would have saved you thousands.
Yes, I am speaking from experience.
But I still do out of state properties with PM in place, due to the high priced market here in the greater Austin, Texas area.
Everything is a trade off with pros and cons to every situation.
Real Estate Agent · Member since 2019 · 285 posts · 149 votes
6y
@Zach Simpson I would say the biggest issue is not being able to drive by and visit the property every now and then. That becomes much more challenging when it requires significant travel, you're putting a lot of trust in the team you hire when you give them 100% of the responsibility. Personally I would find it hard to believe that a PM is screening tenants at the same level I would be. If you're new to investing it's extremely helpful to learn the process first hand, not to mention you're typically less familiar with the local laws, market and economic conditions.
Rental Property Investor · Austin, TX · Member since 2020 · 1 post · 1 vote
6y
Like everything else; there’s pros and cons.
I tend to be an optimist, but some of the CONS include the inability to easily view the state of your property first hand, significant additional costs, difficulties with team management, lack of personal connection with tenants.
That being said, the benefits of investing out of state is that it *forces* you to be hands off. Sometimes it is just easier for me to do everything myself. With an out of state property, that is not an option. This pressure forces you to find long term solutions that leave you as an owner instead of a manager.
I recently rented my apartment in NYC to a tenant and have been traveling through the northeast for the past 4 months and managing remotely. I haven’t gone through a tenant turnover yet and hopefully I don’t have to for a while. I’m moving to Austin now, so I plan on buying a few more properties here.
When investing out of state, the best thing you can do IMO is get a 5 star tenant. If they live there for a long time and take good care of your property, it will mean a lot less long distance management for you.