Property management out of state

8 Replies

Hi! My name is Nick, and I am planning on buying my first rental property before I graduate from college. 

I ran into a little snag, and I would like to get some input from the Biggerpockets community.

For the next 5 years I will be jumping between New York and Idaho for school. Obviously I can't drag my rental properties with me, nor do I want to sell my properties every year.

So I was wondering if you know how to, or have had any experience with, managing properties out of state?

Hey Nicholas, my wife and I live in San Diego but have two rentals in Western Nevada that we manage ourselves.  Both are rented to fellow military members so we have a kinship with our tenants and ask them to help take care of certain small things in our absence.  But we also have connections with local service providers, like a landscaping firm who winterizes and spring-izes the irrigation system every year to make sure it's done right.

Otherwise our strategy is that we have home warranties on each home so when the water heater springs a leak in one of the pipes we simply call in the warranty company, pay the $60 deductible, and they dispatch a plumber to take care of it.

If you're going to travel back and forth between areas where you own rentals you should be able to manage them yourself, in my opinion.  As an added bonus, you'll be able to write off the trips as expenses.

I have 4 properties out of state and I rely on local property managers to look after them and keep them rented. Do your homework and talk to many different managers and check references on all of them

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Thank you both so much for your input! I will need to do more research into property management to see if it is the right choice, but it is great to know that I might be able to manage them myself.

I invested in homes in Phoenix AZ from SoCal. After burning through 7 property managers in 5 years, each time costing me thousands or dollars in rip offs and expenses that could/should have been avoided with competent management, I've concluded that out of state investing is not for me ... if you choose too, I hope you have a better experience than I did ... if you do, be EXTREMELY diligent vetting your PM, and find one you trust 100% before you find the investment property. Good luck to you whichever path you choose.

Hey @Account Closed , that's pretty brilliant what you said about the home warranties. I don't know why I've never come across this before! For the experienced out of state SFH landlords - apologies if this question gives away my "newb-ness" but what is the difference between a home warranty and home insurance? From what I can tell, a home warranty is "optional" but will help cover repairs on "systems" like plumbing, electricity, and appliances (dishwashers, washer/dryers, etc) and as the homeowner, you would pay a flat fee but not the actual cost of the repair. Is this something you all would recommend for the additional $xx/month?

Hi, @Nicholas Polson . Just wanted to give my thoughts as the owner of a PM company who works with a lot of out-of-state investors. If you do end up choosing to work with an out-of-state PM, I would suggest finding one who's been in that area a long time, has deep knowledge of the local market, gives back to the community, has roots there, etc. Not to sound self-serving, but that's how we stand out from other PMs in our area and gain the trust of our clients. We've been around since before the real estate crash and are still here after, and I think finding a company like that goes a long way toward avoiding rip-offs. Not to say that a newer company can't PM like gangbusters, but a longer track record just makes investors feel better. And ask for references. We have new clients come in and sometimes we have to ask THEM if they want references for other out-of-state clients because they don't ask us (???!!). 

Also, there are awesome articles here on BP about how to choose the right PM for you to review while doing your research.

Good luck!

David Panzera

Originally posted by @Vickie Y. :

Hey @Account Closed , that's pretty brilliant what you said about the home warranties. I don't know why I've never come across this before! For the experienced out of state SFH landlords - apologies if this question gives away my "newb-ness" but what is the difference between a home warranty and home insurance? From what I can tell, a home warranty is "optional" but will help cover repairs on "systems" like plumbing, electricity, and appliances (dishwashers, washer/dryers, etc) and as the homeowner, you would pay a flat fee but not the actual cost of the repair. Is this something you all would recommend for the additional $xx/month?

Hey Vickie, a home warranty covers the mechanical systems of your house and is totally optional. They are typically obtained when you buy a home but I like Account Closed's idea and might consider doing that for my out-of-state rentals. Home insurance covers the house and your liability so you are covered incase of fire, slip-and-fall claim or some other type of major issue with your property and it's pretty much mandatory if you can't self insure.