I'm new here but I'm eager about purchasing my first property soon. The idea I have is to purchase a duplex or something similar and "house hack" for my first property. I'd like to live in the property for a year and then rent out both units. For personal reasons I'd like to move to another state after doing so. Does anyone have experience in holding rental properties from out of state and would anyone care to share their experience? Is there anything that I should keep in mind when considering this?
@Richard Busker I am in the midst of that exact plan now, just am preparing to move out of side. Great strategy!
Something to keep in mind is to take advantage of living at the property for the first year. Take the mindset of a tenant and recognize both the good and the bad of living there so you can prepare for any and all complaints or, better yet, make the repairs needed to ensure top market rent.
As far as being out of state, of course the distance from your rental will come into play. If close enough, you can self manage. If not, you'll look into property managers - factor this cost (10%) in when calculating the numbers on the subject property so you're prepared for it. By the time you're actively looking for property managers you'll have already had experience with a real estate agent, loan officer, home inspector, & likely a contractor, workers whose livelihood is based upon clients like you, so you'll know how to manage your interactions with a potential property manager and how to assess whether or not they will be a good fit in providing the services you're looking for.
Good luck! Keep asking questions on here.
@Richard Busker I currently hold 280 units out of state in 3 different states, ranging from duplexes, to 20 unit buildings up to 100+ unit. There are a few key ingredients to success.
1. Buy right, with property management in mind
2. Form a solid team and a back up player for each key team member: Property manager, contractors, insurance agent, attorney, accountant, Real estate broker, lender
3. Underwrite using numbers with 3rd party property management and understand that they are not always looking out for your bottom line like you want them to, so costs will be higher.
4. Understand the financing that you can and can't get. OOS financing is very hard to obtain, so be sure to be aware of that.
5. Hire a real estate agent or someone unrelated to the management company to periodically check up on it
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