How do you manage properties that are hours away?

Question

I’m a young real estate investor looking for properties that generate positive cash flow. Unfortunately, in the Montreal area, it’s nearly impossible to find properties that cash flow unless you put down a very large down payment.

I’m curious—how do other investors manage properties that are located hours away from where they live?

I’ve found some properties nearby that could generate about $10,000 in annual profit. However, I’m unsure how to handle the work involved, like finding tenants or dealing with repairs. At that level of profit, I doubt I could afford to hire a property manager. I’m not sure what they typically charge, but I assume it would eat up too much of the cash flow.

My biggest concern is finding tenants. How do investors typically find reliable renters when they don’t live close to the property?

Drew Sygit · Answer

@Christopher Carrese Gougeon Unless you have a LOT of landlording experience already or money to burn on your "trial by fire" education, you're better off hiring a Property Management Company (PMC).

Also, some of the highest cashflowing properties are NOT in areas you'd want to invest in.

Here's some useful info:

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

• Property Tenant Pool: closely linked to location, but not always.
• Property Location: closely linked to tenant pool, but not always.
• Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties: Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years. Tenant Default: 0-5% probability of eviction or early lease termination. Section 8: Class A rents are too high and won’t be approved. Vacancies: 5-10%, depending on market conditions. Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties: Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years. Tenant Default: 5-10% probability of eviction or early lease termination. Vacancies: 10-15%, depending on market conditions. Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation. Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties: Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability. Tenant Default: 10-20% probability of eviction or early lease termination. Section 8: Class C rents usually meet program requirements, proper screening still recommended. Vacancies: 10-20%, depending on market conditions and tenant screening. Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation. Class D Properties: Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”. Tenant Default: 20-30% probability of eviction or early lease termination.

Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection. Vacancies: 20%+, depending on market conditions and tenant screening. Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score

Pct of Population

Default Probability

800 or more

13.00%

1.00%

750-799

27.00%

1.00%

700-749

18.00%

4.40%

650-699

15.00%

8.90%

600-649

12.00%

15.80%

550-599

8.00%

22.50%

500-549

5.00%

28.40%

Less than 499

2.00%

41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.

We can also share numerous examples of properties & portfolios we’ve assisted investors with!

DM us if you’d like to discuss this logical approach in greater detail!

Lauren Robins · Answer

You're absolutely right—positive cash flow in high-cost markets like Montreal can be difficult to achieve without a significant down payment. This is a common challenge faced by many new investors, which often pushes them to look into secondary or tertiary markets where property values are lower and rental yields are higher. However, that introduces the logistical challenge of managing properties from a distance, something that many investors have found ways to handle effectively with a combination of systems, tools, and delegation.

When it comes to managing properties that are hours away, many investors lean on building a local team. This typically includes a reliable handyman, a cleaning crew (if short-term rentals are involved), and possibly a leasing agent or property manager. For long-term rentals, investors sometimes self-manage from afar by using technology—handling rent collection with tools like Buildium, Avail, or Rentec Direct, and coordinating repairs via local contractors or apps like Thumbtack or TaskRabbit. Some even install smart locks and cameras to facilitate access and monitor the property remotely.

Tenant placement is often the most difficult part to handle from a distance, and you're right to focus on that. Investors usually advertise on local rental sites (like Kijiji, Facebook Marketplace, or RentBoard.ca in Canada), and they sometimes pay a local agent a one-time fee (often one month's rent) to find and screen tenants. Screening tenants thoroughly—by verifying income, credit, references, and rental history—is crucial, and much of this can be done remotely with the help of online services like SingleKey or Naborly. Some investors will drive to the property just for the leasing process, treating that as a one-time investment in stability.

As for property management costs, you're also correct—they typically charge between 8–12% of monthly rent, plus leasing fees, which can eat into a modest $10,000 profit significantly. That said, some investors hire a leasing agent just for tenant placement and then self-manage the rest. Others outsource only emergency maintenance tasks, keeping recurring costs lower while still removing the most time-consuming responsibilities.

Ultimately, success in remote investing is about finding the right balance between delegation and profitability. You might consider starting with a nearby property you can manage yourself while gradually building the systems and local contacts to support remote investing. That way, once you find cash-flowing properties farther out, you’re already equipped to manage them without being overwhelmed.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Mike Paolucci · Answer

Happy to answer any questions you might have and share some of my OOS investing experiences/mistakes.

Claudia Buchegger · Answer

I managed my duplex in Cleveland myself without ever living in Cleveland. Run background, credit, and rental history checks on any potential tenants to find reliable renters. You can also buy a property that already comes with good tenants, this happened to me with one unit of the duplex. When I bought the duplex, there were already amazing tenants in one of the units and the previous owner had done all the screening work. It was very convenient and easy. You will definitely need to find a reliable handyman for any potential repairs. The realtor you use to buy the property should provide you with a list of contacts for everything, including handymen, contractors, lenders, etc.

A good realtor will be able to give you a list of contacts for you to be successful. I do this for all my out-of-state clients who want to buy in Columbus, OH.

I have managed both long-term and mid-term rentals myself and it is completely doable even from out-of-state since everything can be automated now and you can build a strong team of people in a specific city from anywhere.

A good realtor will be able to give you a list of contacts for you to be successful. I do this for all my out-of-state clients who want to buy in Columbus, OH.

I have managed both long-term and mid-term rentals myself and it is completely doable even from out-of-state since everything can be automated now and you can build a strong team of people in a specific city from anywhere.

Christopher Carrese Gougeon · Answer

@Claudia Buchegger thanks for the response. if you don't mind me asking, what is the typical cashflow like in Columbus OH? Or just in The USA.

I don't see much opportunity in Canada so, I'm exploring the idea of buying out of State.

Evan Polaski · Answer

@Christopher Carrese Gougeon, you can outsource the work, as others noted and budget for it in your underwriting. In the states, the typical property management fee for smaller multis and SFR is 10% of gross rent. Depending on the manager, they may include leasing services, but often times add one month's rent for new leases and 1/2 month's rent for renewals.

Going this route, you need to have a collaborative relationship with your manager and leasing agent. Regarding tenants, you typically want a standard list of requirements: i.e.
4x rent in take home pay, verified with paystubs
Credit Score above 700
No evictions on background check
No felon convictions
Confirmed landlord references for last 5 yrs

The reason I say it is collaborative is because if you are buying in "higher" crime areas, lower income areas, etc, the list above may be too stringent for the typical tenant looking in that area. Your property manager or leasing agent should be able to help you refine those requirements. Of course, they are incentivized to make the list non-existent so they have an easier time finding tenants.

But to be honest, you are trading one risk: high buy-in price, with another risk: remote investing, which could entail having people manage your investment in a way that you do not align with.

Eric Fernwood · Answer

Hello @Christopher Carrese Gougeon,

Whether your property is next door or across the country, you simply cannot afford to manage it yourself.

Many landlords mistakenly believe that a property manager's only value is collecting rent. While rent collection is important, it's just one small part of their essential services. Here's what truly matters:

• Tenant Screening: The single most important service a property manager provides is selecting reliable tenants. Most issues can be avoided by not putting a problem tenant in the property. If you think you can handle it yourself, watch the movie Pacific Heights. There are many people who cruise sites like Craigslist and others looking for privately managed rental properties. These people know they can take advantage of you, and they will. However, they know they are very unlikely to pass screening by an experienced property manager and will just look for an easier target.
• Property Marketing: Property managers have access to multiple listing services, which feed popular real estate sites such as Zillow, Redfin, Realtor.com, etc. They can give the property a much bigger market exposure than an individual landlord can.
• Compliance: Property/tenant laws are complicated and change frequently at every level, federal, state, county, and city. Only a skilled property manager keeps you compliant, often through organizations like NARPM. One mistake could land you in court.
• Cost Management: Small repairs can become costly headaches without the right vendor relationships. Property managers have buying power and trusted vendors, saving you time and money. You are just one low-dollar nuisance to most service people.
• Lease Enforcement: Many tenants will push boundaries. A strong property manager enforces leases and handles difficult situations professionally, saving you from potentially expensive litigation.
• Rent Collection: It's not just about receiving payments. Good property managers have processes in place to act immediately when rent is late, which helps educate tenants and protect your cash flow.

Even if your rental is next door, can you truly handle all these responsibilities? Even creating a compliant, enforceable lease is a challenge unless you’re deeply involved with professional organizations.

Do I manage my own properties? My team has delivered over 560 investment properties. I currently own five myself, with the farthest one just five miles from my house. Even though they're close, I simply can't afford the time and risk to save on property manager fees. One bad tenant can cost you more than years of property manager fees.

Summary:

The money you think you'll save managing your own property isn't worth the liability, hassle, and risks. You simply can't afford to do it yourself, no matter where your property is located.

Josh Sedivy · Answer

Hi there! It's great to see you're thinking strategically as a young investor, you're already ahead of the game by analyzing cash flow and weighing long-distance management.

You're right that in markets like Montreal, finding true cash-flowing properties can be tough without a large down payment. Many investors in similar situations look outside their immediate area for better returns, but as you’ve pointed out, managing those properties remotely adds a layer of complexity.

If you’re planning to manage properties that are located hours away, hiring a reliable property management company can actually save you money and stress in the long run, even if the margins are tight.

•

While fees vary, in many cases, they’re worth the peace of mind, especially when you're scaling your portfolio or have a full-time job and live hours away from the property.

Adam Bartomeo · Answer

Hire a property manager if they are more than 2 hours away.

Gladimir Lobo · Answer

Imagine this: You've got a property in Cleveland, found what seems to be the perfect tenant—a self-proclaimed handyman. You do a background check, and everything checks out, so you collect the first month's rent and security deposit. The tenant moves in without a hitch, but you miss out on a move-in inspection because, well, you're remote, you trusted the pictures you got from your remote photographer.

After a week, your handy tenant rings you up, saying, "Hey, this needs fixing and that needs fixing too. I can handle it all, just deduct the costs from my deposit." You think, "Sure, why not?" After the deduction you now have less than $200 as deposit. Four months later, you're still waiting for a single cent from your dream tenant. Calls go unanswered, no rent and you realize you're stuck managing a property with increasing water and sewer charges and a tenant who has vanished into thin air, leaving you holding the bag. Remotely managing properties is a fool's errand. Built property management cost in your proforma/deal evaluation or stay home.

How do you manage properties that are hours away?

How do you manage properties that are hours away?

Most Popular Reply

16 Replies

FICO Score	Pct of Population	Default Probability
800 or more	13.00%	1.00%
750-799	27.00%	1.00%
700-749	18.00%	4.40%
650-699	15.00%	8.90%
600-649	12.00%	15.80%
550-599	8.00%	22.50%
500-549	5.00%	28.40%
Less than 499	2.00%	41.00%