we live in SoCal. and we are really interested in purchasing a rental duplex or 4plex in other state( now we are thinking about SC) we have a broker and family members there can take care of it if it's not complicated problem.
However, a friend told me being an out-of-state landlord is a lot of hassle, like I might need to going there a lot for some emergency. Even purchasing a property that's a little far form where we live is not wise. so It's just not a good idea to be a out-of-state landlord. Is that true? Thank you.
I believe there's some podcasts that talk about this - check those out under Learn.
Being an out of state landlord does mean responsibility -- after all, it's an investment. But you don't need to be flying out there all the time. That's what a property manager is for! The key is finding a good company you can trust. You find a good trustworthy company to park your retirement assets -- this is no different.
Going off of what Dawn said, long distance trust with a property manager is developed through full transparency. This includes updates on any work orders, rent collection, and periodic pictures of the property. Often times a good property manager is the only factor that stops investors from buying out of state, so if you do invest in SC be sure that you are kept in the loop.
Finding a good honest handyman is better. He only when do repairs. To keep him honest get multiple estimates from other handymen on the larger repairs. Your friend may not be that experience with out of state landlording. I have even bought my last property without going to see it. You do need a ground team that you can trust. Good luck in your investing.
New member to this community myself, but I too am an out of state investor. I reside in California and own 2 apartment buildings in the suburbs of Chicago. I don't use property management as too often than not their services are sub-par.
I collect all of my rents electronically via Chase Quickpay. I have a local handy-man/contractor that I've built a lasting relationship with. When a problem arises, he gets the phone call -- not me. He keeps me in the loop every time a service call is made (leaking toilets, clogged drains, etc) and I pay him when he accumulates 4-5 visits. When something major occurs he knows to consult with me first, but fortunately that hasn't happened too often.
My local RE agent helps me with listing and showing the apartments when required. He charges me 50% of first months' rent and I do the screening of the applications.
Since I have friends and family in Chicago, I make it a point to drop in town 1-2 times / year. When there, I will inspect each unit and give a brief "hello" to each tenant. Giving a warm smile and a handshake goes a long way with building a relationship with your tenants. It helps personalize you as a human being vs some Real-Estate entity. I will also walk the property and talk with neighbors from adjacent homes. Most of the time it is nothing more than polite conversation, but sometimes you can learn a thing or two about your tenants.
Managing in this fashion has proven viable thus far. It also may help that the profile of my tenants are professional/white-collar. So the drama is rather limited. I'm not sure how this strategy would play out in a lower income / Section 8 type of neighborhood.
You should definitely consider Atlanta, Ga and South-side Chicago/ Indiana. Currently Clayton County (just 5 minutes from the Atlanta airport) has the 2nd highest cap rate in the nation. *According to redfin*
Investing out of state can be difficult but not impossible. We manage for both in-town and out of town investors. We handle all aspects of the property for both owners alike; marketing, screening, leasing, inspections, repairs, rent collections, security deposit returns, evictions etc. We provide more than adequate communications with 24 online access to account information including 3 inspection a year with full color photos. Our experience has been that since our local owners have access to this information they don't usually go by the properties too often. They may do a drive by but certainly never access the property. They like to remain "anonymous" to the tenants as we have a little more leverage with the tenants when things might get a little bit hairy like missed payments, needed repairs etc. Our leverage comes from our deferment to the third party style. When a tenant has an unusual request or offers up excuses rather than pay rent, we say something along the lines of "If it were up to me, I would help you but we work for the owner and we have a contract we must uphold. If we don't the owner can sue us" or something to that affect. It has proven to be effective in achieving results for owners and maintains a "teammate" mentality with the tenants and owners alike.
Ultimately, it comes down to what makes you comfortable. Don't take advise from anyone who isn't accomplishing what your goals are as they most likely are offering their opinion not necessarily advise. Lastly, Property Management is a full time job. With the number of laws and repercussions for not adhering to laws, it can become overwhelming and ultimately too much for anyone who cannot treat it like a full time job day in and day out. Please keep that in mind when making your decision. If you're not born into wealth, real estate is the number one vehicle to creating wealth. Don't let a tenant take your dreams from you!
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