Considering self managing a rental over an hour and a half away

Considering self managing a rental over an hour and a half away

Queens, NY · Member since 2015 · 130 posts · 34 votes

I would like to hear some fresh perspectives and ideas from the community on how to go about making this a feasible situation. Since all I can do during my capital accumulation phase is read and think about REI, I end up giving myself anxiety about imagining all the potential headaches that could occur. I've tried to remain positive and think creatively about how I would solve hypothetical scenarios that come to mind.

Since most emergencies require police, fire departments etc., few situations should necessitate my immediate presence as a landlord. If I get a call about something not working, and they want me to come take a look? Sure, have a video call to see if it's something I can diagnose remotely. Doctors are literally seeing people via phones and tablets nowadays, even prescribing medicine. Landlords should take advantage of this. Contractors need to work on the place while vacant? Install a lockbox outside, install IP cameras inside. Send contractor the code, cameras turn on so you can keep an eye on things from your phone at work. You're good to go. 

I understand that many situations will require my presence, and if I get a bad tenant, or a bad contractor, those methods will cease to work. Tenant could be hostile, contractor could still screw me over. So really, it looks like screening will be the most important factor. I'd be interested if some of you could either poke some holes in all this, or just offer advice based on what you've gone through as a landlord that wouldn't have survived if you were this far away from your property. 

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Professional · Atlanta, GA · Member since 2015 · 63 posts · 30 votes
10y

I think it really depends on (a) the network of contractors you can put into place (b) the quality of your property and (c) the quality of your tenant.  

I have a rental around the street for the same reasons you were thinking of.  But I never have to go there - it could just as well be across town or in another state if I had the network set up and a solid property.

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  • Investor · Pelham, NH · Member since 2015 · 26 posts · 12 votes
    10y

    This is a great post and very helpful. I will close on my first property (3 units) in 2 weeks and it is approximately 1:20 away from where I live, so I will be in the same situation as @Sean Tracey questions.  I will probably find a handyman in the area that can handle anything minor, but if it is something serious, I always know I can take a ride to the property.  I know that living in New Hampshire snow removal is a big thing so I know that I won't be able to plow it myself, so finding a yard service that does plowing in the winter is going to be important for me as well.

    Thanks for the great scenario Sean....

  • Investor · San Diego, CA · Member since 2013 · 19 posts · 16 votes
    10y

    About 6hrs to Phoenix and a long ways to Texas.  If I go to Texas it is usually part of a trip for education activities as a part of a real estate mentoring group out there, and I'll fly out.  But there really is nothing you can't do by phone if you've got a trustworthy competent group on the ground locally that you can turn to.  If you're renting to lower middle class and up, that also helps with minimizing issues and management time.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    10y

    @Jim Ehlinger  snow removal can be hard to get the right service if you aren't specific enough with the plow guy (and even if you are). Reliability and knowing when they are going to come in a storm is essential.  Do they wait for the end or will they come twice if the driveway isn't passable.  I advise to include as little snow service as you reasonably can (none for a SF). I had one guy who was shoveling out tenant cars-which was not in the specs. We haven't yet installed exterior cameras but will this year, that is another way to have eyes on the property.

  • Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    If I could find a good deal a hour away I would be all over it.  I turned my primary house into a rental when I had to move for work.  I managed it myself from far away.  The tenant was fairly handy guy and took great care of it never called me.  I am not saying you should hand your investment over to a tenant to manage however if you have a good deal in this market I think you pounce.  Managing it from a little distance may take a little extra work/expense but deals at least as far as I can tell are getting harder to find all the time and no property is going to be completely head ache free.

  • Real Estate Professional · Atlanta, GA · Member since 2016 · 1 post · 1 vote
    10y

    @Sean Tracey In terms of a screening tenants, I would recommend checking out the new Rent Marketplace rentmarketplace.com that will help you easily manage the application and screening process online. They will have leases soon too.

  • Queens, NY · Member since 2015 · 130 posts · 34 votes
    10y
    Originally posted by @John Duffy:

    Some of these points may have already been outlined...This is how i look at it and it works for me.

    I own all my properties in my LLC's as i want separation between myself and (litigation)...I have property management in place on all my rentals as i:

    1) Don't want a "landlord" job. I'm an investor, not a landlord

    2) Want separation between myself (the owner) and my tenants. We dont need to know each other.

    This is how i look at my investments. I factor in an additional 10% (prop mgmt fee) when i purchase properties.

    Thanks. How much ROI do you shoot for after accounting for the 10% PM fee? Also, on the subject of LLCs, I've read some interesting threads on BP where people debate their usefulness:

    https://www.biggerpockets.com/forums/51/topics/199968-do-you-need-an-llc-absolutely-there-is-no-debate-about-it

    https://www.biggerpockets.com/forums/51/topics/177095-asset-protection-podcast

  • Surprise, AZ · Member since 2016 · 58 posts · 20 votes
    10y

    @Sean Tracey, These are the expenses that i factor into my purchases that i plan on holding: 

    insurance
    taxes
    (rehab) 
    10% prop mgmt
    5% vacancy
    5% maintenance
    5% capex

    I shoot for numbers above 9%. Probably averaging about 11%  Clearly, all this is factored in at the time of offer on the property. 

    As for any debates on having an LLC, there is no debate in my mind. What would be the downside of having properties inside an LLC, none! As for the, ill just over insure the properties and hold them in my name. Insure for a million each, then get sued for two million, now what!!! lol

  • Queens, NY · Member since 2015 · 130 posts · 34 votes
    10y

    Thanks for sharing those details @John Duffy. Yeah, I'm not sure where I stand on the LLC debate. I've got a bit of reading to do before I consider myself informed enough to have an opinion on the matter.

  • Rental Property Investor · Dover, NH · Member since 2016 · 47 posts · 9 votes
    10y

    @Jim Ehlinger    congrats on the purchase. Can I ask where in NH you are buying? We're closing on our first duplex in Dover in a few weeks. 

  • Investor · Pelham, NH · Member since 2015 · 26 posts · 12 votes
    10y

    Hello @Nate Burnett,

    My purchase is in Laconia, NH, and I should be closing around Memorial Day, plus or minus (hopefully sooner) a few days. It is a duplex with a stand alone 2 car garage that is rented out separately, all 100% occupied at this time.  Hopefully it will stay that way for awhile until I get my feet solidly on the ground.

    Congrats on your first purchase.

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