How to manage out of state property with no manager
Member since 2023 · 11 posts · 12 votes
How to manage out of state property with no manager
Most Popular Reply
Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes@Jolene Blackbourn What screening process did you use before hiring this PMC?
Encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.
To avoid going through the same poor experience, keep reading.
Even if someone give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.
We also can’t believe how many owners hire the first PMC they speak with!
Then they complain their expectations aren’t being met!
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – and they often select the first PMC they call!
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Logical Property Management4.9464 Reviews
24 Replies
- Member since 2023 · 11 posts · 12 votes3y
And to be clear - I've only been manager free for about 2 weeks and already repaired everything.
- 3yJames WilcoxBusiness MemberReal Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 603 votes
Quote from @Jolene Blackbourn:
I purchased a house a few months ago. Since that time the manager has not communicated with me, my tenants had no central air all summer and I didn't know and there were many other issues. My property manager quit last week. I apologized to the tenants and said let's start over as of 9/1. They owe me back rent and are angry about the repairs that I didn't know about so I think we are pretty even. They have decided today to move out and break the lease. It's already such a mess that I'm happy to get them out and start over. But I'm not sure how to do a post move out inspection or get a new tenant in! I'm half a country away! I just paid for a year of BP and Avail and would hate to see that money go to waste. I hated the property manager so not sure I want to try a new one. How do you show a property to a prospective tenant from out of state? How do you do all this back and forth in between stuff from out of state? I'm in CA and the house is in KY.
Sorry @Jolene Blackbourn that you went through that. You do need a PM or a very strong boots on the ground presence because of your distance from the property. Although you may not like it because of the bad experience going the PM route is what I recommend. It sounds like you just had a bad one or someone operating illegally. You must be a licensed real estate agent to manage property in KY. If they were I report their behavior as a PM to the local realtor association because that level PM is not allowed. What part of KY is the home?
REI James w/ eXp Realty54 Reviews - Member since 2023 · 11 posts · 12 votes3y
Thanks @James Wilcox - Winchester. My realtor recommended a PM company associated with her company. I liked them but chose this other one unfortunately. I will reach out to them then. I was hoping after losing the PM and correcting all issues that the tenant and I could just do it for now but now they don't want to pay this month's rent but want to move out a month from now and claim they will leave it in the condition they found it- with uncleaned carpet and walls but I had teh PM and my handyman saying it was move in ready so definitely this is going to be a bit of a difficult unloading....
Quote from @Jolene Blackbourn:
I purchased a house a few months ago. Since that time the manager has not communicated with me, my tenants had no central air all summer and I didn't know and there were many other issues. My property manager quit last week. I apologized to the tenants and said let's start over as of 9/1. They owe me back rent and are angry about the repairs that I didn't know about so I think we are pretty even. They have decided today to move out and break the lease. It's already such a mess that I'm happy to get them out and start over. But I'm not sure how to do a post move out inspection or get a new tenant in! I'm half a country away! I just paid for a year of BP and Avail and would hate to see that money go to waste. I hated the property manager so not sure I want to try a new one. How do you show a property to a prospective tenant from out of state? How do you do all this back and forth in between stuff from out of state? I'm in CA and the house is in KY.
You do not have any other choice, hire a new PM,,,,,,or see if a realtor will show it for you and get it rent ready again.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes3y
Self managing is the best and actually pretty easy out of state as long as class B or better. Just find a good handy man and also a leasing agent. Have photos sent and videos of work.
- Member since 2023 · 11 posts · 12 votes3y
Thanks @Henry Lazerow! I love my handman. I guess I need a leasing agent.
- 3yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Jolene Blackbourn What screening process did you use before hiring this PMC?
Encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.
To avoid going through the same poor experience, keep reading.
Even if someone give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.
We also can’t believe how many owners hire the first PMC they speak with!
Then they complain their expectations aren’t being met!
In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.
It's often a case of not doing enough research, as they don't know what they don't know!
Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – and they often select the first PMC they call!
So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Logical Property Management4.9464 Reviews Sounds like you don't need a pm... If were able to have everythign fixed up, remotely.
Why not ask your agent to help you lease it out? At least around here the tenant pays the commission. If your agent is smart, he or she will stick with you and get more deals. Or, even be able to pick up clients from your renters. Even though I locally self-manage, that's how I did it since I was so busy with my day job. I know BP tends to be pretty "anti-realtor," but they can be a real resource.
Good luck.
- 3yJames WilcoxBusiness MemberReal Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 603 votes
Quote from @Jolene Blackbourn:
Thanks @James Wilcox - Winchester. My realtor recommended a PM company associated with her company. I liked them but chose this other one unfortunately. I will reach out to them then. I was hoping after losing the PM and correcting all issues that the tenant and I could just do it for now but now they don't want to pay this month's rent but want to move out a month from now and claim they will leave it in the condition they found it- with uncleaned carpet and walls but I had teh PM and my handyman saying it was move in ready so definitely this is going to be a bit of a difficult unloading....
While it's technically possible to manage remotely, I wouldn't recommend it. A skilled PM is invaluable for peace of mind and reduced vacancy rates. They are the most important member of the team so vest several and work with the one that aligns the best with your standards. Given my familiarity with Winchester, I'd wager that this is C-class asset, which reinforces my suggestion not to manage from a distance.
Although there have been significant issues, the tenant isn't entitled to withhold rent or dictate terms to you. It's doubtful the property will be move-in ready upon their departure IMO. Strive to resolve this, but there are warning signs of a challenging transition, as you mentioned. Trust your instincts, but also ensure you adhere to legal guidelines.REI James w/ eXp Realty54 Reviews - Member since 2023 · 11 posts · 12 votes3y
Thanks @James Wilcox I just sent over a lease amendment to get them out but dictate the terms. Here's to hoping they just agree!
- Member since 2023 · 11 posts · 12 votes3y
@Michael Smythe thanks so much! I will read through it all. I did interview 3 companies (it's a small town so couldn't find any others). I liked this one best (and they were not the cheapest). But, the one I liked 2nd best is affiliated with my realtor so thinking she might be able to put in a good word and make sure I get the best service....
Jolene,
If I had to bet, I would bet on YOU... No one will ever care more about your financial independence than YOU...
I've managed my rentals from Iraq, on the other side of the world, in a backward timezone, for over ten years. If you have less than ten rentals, I think you can and should manage your own stuff.
If you give away control, you are defenseless and in the end, there will be no one to save you. Unless you micromanage the heck out of your PM...well, until they drop you for being a hassle and you have to find another one... lol
I'll let you in on a little secret, the BEST PMs don't even like small-time landlords because there's not that much money in it for them (e.g. time commitment vs money earned). The good PMs would prefer large apartment buildings for economies of scale. I think the real underlying reason why good PMs don't like small-time landlords, is because a lot of landlords are too cheap and won't invest reinvest back in their rentals...
I think the reason why that happens is because landlords are not taking full responsibility. Mom-and-pop landlords should treat their rental operation like a business and take responsibility for their own success, e.g. do their own management until they grow beyond ten rentals. They don't have to go all out, but they need to build systems. I call this, The Plain Vanilla Business Advantage, e.g. business number/email/website/FAQs/etc...
Then, YOU play the "Property Manager" role and YOU are just and employee, NOT the greedy landlord and sole decision maker...
Also, I recommend doing a little something I call "Self-Service Management" ...basically, I groom my tenants to have an ownership mentality and I provide them with the tools and resources to resolve things on their own because I'm a long-distance self-managing landlord, therefore, I have to be proactive vs reactive. Anyways, that's my 2 cents...
--
I do have to admit, I'm so tired of all the property manager bias out here misleading small-time landlords! Think about it, we are on a real estate investing forum, and all the PM have alerts to stuff like you posted; they swoop in looking for business. I don't have a problem with that, BUT when they make it seem like hiring the "right" PM will solve all your problems that's wrong!
...I'd think the three most important things, in order, are: The Property, The Tenants, then... The Management. So, that means, when problems come up, first look at the property and its location, and consider the quality of tenants it attracts, then, look at the management. NO matter how good the PM is, if you have a bad property with bad tenants, there will always be problems. But who am I? I could be wrong, don't listen to me.
- 3yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Jolene Blackbourn would recommend you write down everything that the current PMC did wrong and also whatever else you can think of that you would like.
Then make sure it's covered in any new management contract you sign.
Logical Property Management4.9464 Reviews - Member since 2019 · 7k+ posts · 4k+ votes3y
my best recommendation for PM is find a local PMC, not a national brand one, find a PMC that has smaller size but managed by a super man/woman in this business where she/he can take care everything correctly and properly.
I am having five PMC at this very time due to geographical differences.
There's just no way I would ever want to manage property out of state myself. It is just super impractical and stressful.
But if it's local, I would manage myself. - Emerald Coast, FL · Member since 2016 · 28 posts · 10 votes3y
I went through something similar. Flew down, interviews 4 property managers then chose a new one. Just cant really do an out of state rental professionally without boots on the ground like someone else said.
- Member since 2023 · 11 posts · 12 votes3y
@Michael Smythe thanks! good idea!
- Member since 2019 · 7k+ posts · 4k+ votes3y
lot of post in BP, because it's opinion, is range from luxury , DIY to "out of your mind" situation.
Managing a rental plumbing issue in Ohioville somewhere while you are in battleground in Bora Bora Afghanistan, is just super almost doesn't make sense.Having PMC is part of the business LOL
For me I involved my PMC, even Prior of purchasing a home, if they say no do not buy there, I would not buy.
So it's good to have this relationship is started even before you dig into a region.I also know folks that rented out their basement and still use PMC for privacy reason.
- Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes3y
@Jolene Blackbourn Thats a tough situation, and especially stressful since you're out of state. I own multiple properties in different states (FL, WI, OK) and I live in San Diego, so I know where you're coming from!
Its definitely possible to self-mange from out of state, and I've done this successfully, but I think you should consider hiring a different PM company.
How did you find that first company? A google search? It seems like they did a terrible job all around. I bet you there is a great property manager somewhere in that town.
I would make a post here in the forums asking "Who is the best property manager in <name of the city/town>?" Write down all those responses and start calling them and interviewing them. Ask for referrals for other owners they work with who live out of state. Call those owners and get their feedback.
You want an investment not another job, so I recommend finding that great PM. They are out there!
Good luck and keep us updated on your progress!
Quote from @David M.:
Sounds like you don't need a pm... If were able to have everythign fixed up, remotely.
Why not ask your agent to help you lease it out? At least around here the tenant pays the commission. If your agent is smart, he or she will stick with you and get more deals. Or, even be able to pick up clients from your renters. Even though I locally self-manage, that's how I did it since I was so busy with my day job. I know BP tends to be pretty "anti-realtor," but they can be a real resource.
Good luck.
>At least around here the tenant pays the commission.
Never heard of this. In my market the LL pays the commission. Tenants often have enough difficulty getting deposit and first month rent. If they paid the commission also that would be tough. However our average rent for 2 BR is likely over $3k.
Yup, markets differ... Our commercial markets the landlords pay the commissions, but like i said for a residential rental the tenants pay it.
Yup, deposit and 1st months rent plus a months commission all add up... I've just looked at it as part of the process, and if they can't afford it then maybe I don't want to be renting to them anyway.
- Chicago, IL · Member since 2020 · 184 posts · 182 votes3y
You said you love your handyman, yes?
i would approach him and ask if he would like to handle the showings around his schedule. You can then give him the one month fee youd give the agent. Why do this?
Also, I think "they'd" find out pretty quickly that the handyman was brokering real estate without a license (I'm assuming the handman isn't a licensed agent).
- 3yKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
This is what I did. My partners were international or out of state. THey just pay me to show up and manage the tenant turns etc
- Member since 2023 · 11 posts · 12 votes2y
Thanks everyone for your help! It got a bit messier before it got better but I have a new PM through my realtor's recommendation and it should be rented out any day now....
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