Holding me back...

[David Buchanan]

Hi BP Family,

Father keeps telling me investing outside of your area (out of state/city) and hiring a property management company is a ridiculously bad move for a newbie investor. 

His reasoning being you must BE there to see how the property is doing all the time and that PM companies are trying to get the most amount of $ with the least amount of work....acting as if hiring a PM company is getting a 'free lunch' on your first property, and we all know the saying...

Although I do somewhat agree, there are lots of restrictions for me not being able to personally manage my property, so hiring a PM company is ideal, and I would like to think about how I can still get into the market!

Any suggestions on this topic?  I know PM companies are not ideal for newbie investors but are there ways to stay on top of them to make sure you are getting the most for that 10%?

[JD Martin]

Actually, a good PM company probably *is* ideal for a new investor, as they will understand the vacancy and eviction process, have a dossier of contractors for repairs, and generally make like a little more headache free - for a price. One of the attractive things about real estate is the ability to put your own time/energy into it to increase dividends. If you cannot do this, either because of geography, knowledge, time, etc, you should also consider other forms of investment - not saying you shouldn't invest in real estate, only that using a PM company will make your returns a little closer to other vehicles.