Would You Own a Rental Property that's 200 miles Away?

40 Replies

I am a new potential investor. I'm still lurking, reading, learning here. My long term goal is to take early retirement from my company within the next 2 years, and buy a couple of multi family properties to supplement my income.

My situation is that I currently live in CT and have a get-away place in New Hampshire. I am considering making my investments up there since the long term goal is to live there at some point but I am staying in CT for the foreseeable future due to family obligations.

My questions is, is it wise to try to be a long distance landlord? Especially since it would also be my first time? I have connections up there that could handle minor repairs and stuff like that and I am close enough that I could run up there if something big came up or there was a major tenant issue.

Any thoughts?

My rental property is 2700 miles away from where I live and it's working out great. I'm getting ready to buy another one.

I live in a more costly real estate market and so I found I couldn't compete as well where I live, plus I'm not sure if we'll still be here in a few years. So I bought a house in my hometown, as we will always have family there and it's a much cheaper / less competitive area. I do recommend using a property manager when doing this, I wouldn't have been able to screen tenants or get repairs fixed timely, being so far away. Luckily, since my family lives and does business there, I have plenty of referrals for all that stuff.

If you have people there that can help you with little things that come up and you know the area to be able to evaluate things I don't see the issue.

If you go up there regularly anyway you have a built in time to look at the places you have and to look at possible deals.

Oh and you can write off the mileage and lots of other stuff now you are going there for business and not just for a vacation. :)

What part of NH are you considering? I'm assuming your second home is in one of the vacation areas. If you wanted to split the difference, Southwestern NH is very accessible (from 91) to most of Connecticut, and you could build a portfolio that would also be accessible from anywhere in NH once you move here.

Inventory is a bit of a problem. But prices and rents are very stable.

yes just hire a company to watch over your property. they will do everything for you while you just chillax and recieve a paycheck every month

Originally posted by @Account Closed :
yes just hire a company to watch over your property. they will do everything for you while you just chillax and recieve a paycheck every month

Ummmmm...yeaaahhhh.

No.

@Michael Eastland

It doesn't matter where your properties are. make sure you learn how to manage your property manager. Treat it like a business.

Real estate Investment is a business, nothing really passion about it. Unless you have NNN properties. Then it may be passion for 10 to 20 years depending on the lease. After that you have to start over again to find a new tenant.

IMO, distance is the last thing you have to worry; provided you have a strong ground team & you managed them well.

Updated about 4 years ago

I meant passive, not passion.

We own rentals that are over 300 miles away (in AZ). As long as you have a good PM, it's a great way to get some additional income.

@Richard C.

why do you say no?

how do you think people manage property in other countries? or manage 100s of properties? they hire a company to look over the property. they handle moving the tenants in and out, kick em out, they get the pay, they handle everything

Yes Derek, thank you for explaining property management.

Now lets ask other experienced landlords, including those who utilize property managers, if their job description includes the word, "chillax."

thank you everyone

@Richard C. it is in west central New Hampshire and Rt91 is my route of choice to get back and forth. I am very familiar with the area from a visitors standpoint, not an investors standpoint. I have talked to one property owner so far but his properties were in the next town over. He bought at the top of the market so he didn't do so well when he sold.

A property I'm interested in is a 4 unit building with an additional 12 small garages right in town, for under $200k.

I do plan to start renting my current property to skiers next winter since we are next to a ski area and I don't ski. It will help to offset some of my costs.

@Richard C.

you got butthurt cuz i said chillax? lol....

Hi Michael, I currently have a rental on the other side of the world...literally, and don't really have problems dealing with it as much of the upkeep is dealt with by the HOA and it was pretty well built to begin with.

That being said, I think the ease of owning a rental long distance would really depend on the property itself. for example, I would be more inclined to own either a condo unit or a large apartment complex, i.e. 20 units or more, long distance.

Single families, four pled, etc in my past experience, generally don't have the economies of scale to justify a property manager to really pay attention to a property. Certinaly it can be done profitably, but I feel it takes some "time on the ground" to find a good property manager, and then you need to be willing to travel there and find another one if they move on.

A single condo unit is fairly simple as the HOA takes care of the exterior and so most of the time it's flooring. That being said if I was going to own single condo unit, I would tend towards middle upper to upper end of market.

This is just my personal thoughts on long distance.

@Account Closed

Reply back to the group after you have owned several dozen units for multiple years.

Income producing property can be hands off with the right property, property manager, and team set up. However the people that never deal with property issues probably own something that is more A class with much lower returns (think 4-5 cap). They spend more money to pay the right people so they can be extremely hands off. That all lowers returns and isn't really inline with most investors on BP or most small/mid size investors in general.

If you are buying B to C class real estate, your rentals will not be hands off even with a great property manager. Unless you hire someone full time to manage your portfolio & property manager (not possible on small scale) you will have to be involved with the property beyond cashing checks.

How often are you up there and how much rehab does the property need? Yes it can be done but we are approaching a year with a 6 unit that needed lots of rehab and that is what took the time and caused some hassles. It is 90 minutes away and we have a property manager but I didn't feel right about being warm and toasty when we had a furnace issue at the apartment and big repairs I liked to self manage. So there were a lot of trips. I would be inclined to say that if the rehab is reasonable and the renters are good quality you can do alright.

IMO you should not start off that far away unless you have lots of money for your education. Everyone says yes you can do it with a good pm and the right team. You have to do lots of foot work to get the right team in place and some small communities don't have people that would be the right members of a team for an out of town investor. Building that team and finding that pm can take lots of money out of your pocket. More so if you are not experienced.

thank you everyone, lots of good info to absorb

We live in southern California, and own two houses in Florida, three in Memphis, two in Atlanta, one in Las Vegas, one in Indianapolis, two in Victorville, CA (high desert), and two in Austin, TX. We previously owned houses in some other states. There is no reason to limit your search to local areas, unless you want to self-manage the properties. Owning in multiple areas reduces the risk of adverse impacts to your portfolio by local events.

@Michael Eastland 200 miles or 2000 miles doesn't make a difference if you buy in the right market and have great property management. Investing long distance does have some unique challenges but I'm a believer that investing in a strong remote market is better than investing in a weak local market. By weak I mean the kind of returns you can get. You live in a high cost market where they median home price is over $400,000. You can get decent cash flow and ROI at those prices just like in CA.

Originally posted by @Michael Eastland
"My questions is, is it wise to try to be a long distance landlord?". No, it's not wise to try be a long distance landlord. Hire a good property manager and be an investor, not a landlord.

@Michael Eastland

You've received a lot of good information.

A good point to take away from @CK Hwang is that the nicer the property and the nicer the location the easy it will be for you to manage from 200 miles away.

A good point to take away from @Bill S. is that smaller communities and certain cities don't have the amount of property managers that larger cities have. It might take you longer to find someone qualified to properly manage the property.

A good point to take away from @Colleen F. is that depending on the type of deal and age of property you might need to spend a chunk of time there occasionally handling larger capital improvement projects. PM's are generally great with maintenance however not the most equipped to get you the best price on a large project etc. They might have the ability to get those items completed however it will come at a price.

@Kimberly T. & @Stephen Masek also make some good points about having a solid PM in place.

It can definitely be done but make sure you have access to a solid PM, possibly buy in nicer areas (those high returns in the marginal areas are more difficult to manage), and allocate time for larger projects or a disaster. Good luck!

You will definitely want to get help from somewhere, IMO a property manager along with the rest of the support you say you have. Not saying that all your needs will be magically covered, but there will be times that you just can't get to the property (due to the distance) and you will need that type of support. I don't want to give the assumption that you will be able to be "hands-off". You will have to be an active participant, but it will definitely be a lot easier with a team to support you, especially with a property manager that fits your specific needs. It's definitely something you want to consider and see how it fits into the overall budget for the acquisition of any long distance properties.

Originally posted by @Account Closed :
@Richard C.

you got butthurt cuz i said chillax? lol....

Not the word so much. But you shouldn't be selling the "passive income from your couch" crappola unless you have the experience to back it up. And if you had the experience to back it up, you wouldn't be selling.

Landlording can be hard work, even on the limited scale I do it. Obviously you can mitigate that somewhat by hiring people to help with the work. But anyone taking the approach you recommended is likely to find themselves much poorer for the experience.

Michael, I'm guessing from your descriptions that your current property is near Sunapee? And that you are considering buying rentals either near Sunapee or in the Claremont area?

If so, as you know, Sunapee is a multi-seasonal recreation area, so seasonal rentals should be fairly easy. There will be multiple real estate agents in the area that specialize in that, so you might look for them to help you.

If you are considering Claremont, you DEFINITELY need excellent property management. I know an investor with a significant portfolio in the area and who therefore formed his own PM company. I don't know if he will take on outside management, but I can check with him if your holdings are in Claremont. I also know another PM company with a holding in Charlestown, and they do PM for others, so I can connect you with them. I referred a friend to them, and she is very happy.

@Ann Bellamy

you guessed correct, it's actually Newport which is between Claremont and Sunapee. If you'd like to check if either is willing to take on outside clients that would be great. I am not ready to commit to anything yet but it will help to know what help is available.

Thank you

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