Becoming a long-distance landlord. Any advice?

Question

I bought a 2-flat less than a year ago in Chicago and now need to move away for a job. Weather conditions this past winter caused a few pipe bursts, flooding the basement, so I'm understandably nervous to leave the property without someone to monitor the place (not my tenants) and do simple repairs (I have a great contractor/plumber for bigger issues). I found a guy who is willing to do it as a side job, but I'm not sure what to pay him. I want to keep him motivated, but don't want to throw away money. What would you pay? Any other tips?

Account Closed · Answer

@Kelly Briley

Kelly, what I'm gathering from your post is that you plan to "self-manage" from a distance with the help of this local guy who'll be doing it as a "side job".

My tip would be, as someone who manages a rental unit from distance, engage the services of a professional property manager. It will not be a side job for them and they will manage your property like a business. To find out how much they cost, you'll have to interview a bunch of them and ask them what the going rate is. In my market it ranges from 8-12%. By all means have a friendly ally there to keep an eye on things for you (I have my mom living nearby and if the property manager alerts me to a maintenance issue, I have her go by and make sure the maintenance gets done and the problem resolved).

The reduced cash flow you get from the property will be well worth the peace of mind knowing a professional is managing your property and you won't get middle of the night phone calls from your "guy".

Elizabeth Colegrove · Answer

My husband is active duty navy, so "close" is relative. As a result one of my largest "asset"/ large part of my business model have been developing my ability to self manage the houses from long distance. As I talk about on my website and in my blog, we have been very successful with our class A residents managing long distance. I have no issues relying on my tenants and venders I find to fix issues.

This has allowed us to save over 10k a year. While it has had it's "moments" in stress to date their has been no negatives. Feel free to pm if I can help! Best of luck with you new job!

Kelly Briley · Answer

Thanks, Account Closed . I'm going to start calling property managers tomorrow. I'll be in Chicago every 6 weeks or so, so I can check in on the property periodically. I'd probably end up paying the "guy" $200/month, so it may be worth it to add a few extra dollars for a good property manager. I appreciate the time you took to explain it to me.

Ronda R. · Answer

I am sure every situation will be different but I was lucky enough to have a very good friend that I trusted do the walk throughs and turn over keys for me. Here is how I handled it:

I placed my own ads on craigslist and had them email me. I then emailed them back an application  They filled it out and either mailed or sent me a scanned version back. I screened the apps and called references.

I then did a credit check through a company I found online for tenants I was serious about . The tenants downloaded the application, signed it and scanned and emailed it along with their id directly into the company. They paid for the credit check. The company would then send me the results and I made my final decision.

Once we had a move in date, I emailed my friend a walk through check list, the rental contract and had him collect the check. He mailed everything back to me with a spare key. Usually I would have the locksmith meet them during the walk through to change the locks and get new keys.

Any repairs I would call the repair person after reading reviews on yelp or google or use someone my friend recommended. He was in the construction industry.

As I am typing this I am realizing how lucky/blessed I have been. I plan to buy in Ohio and will be shopping for a rental manager. From what I understand rental managers there have to be realtors.

Andy H. · Answer

@Elizabeth  Colegrove, like @Melise Smith, I'm curious how you handle things like lease ups (showing the unit), move out/move in walk throughs, and evictions (specifically filing with the courts) when managing at a distance. Do you hire a realtor to do the lease up for you? Do you use an eviction service (or perhaps you've been lucky enough to not need this)? Or do you physically go to the property location to handle these things?

Melise Smith · Answer

@Elizabeth  Colegrove how do you handle issuing keys & move out/move in walk thrus long distance?

Kelly Briley · Answer

Thanks for the advice Elizabeth  Colegrove I just signed up for your blog!

Atchut Neelam · Answer

Finding a good Property Manager is  the key.

Jay Hinrichs · Answer

Hire PM... Tell PM you have a your own handy man if things come up

Becoming a long-distance landlord. Any advice?

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