Landlording from out of state

9 Replies

I am new to the rental portion of RE investing and am analyzing the following deal. This is a basic overview as the numbers aren’t important to my question.  6 New construction single family rentals. 2 bed 2 baths renting at approximately $950. 

I am considering managing them myself to keep my cash flow up. However my family and I are planning to move shortly after the build out of the lots. If I was staying it would be a mute question but with the move would it be advantageous to do my own management or is this an aweful idea being that I am new to property management?  Any advise on how to manage from a distance, from those thinking it may be a viable option would be appreciated.

Thank you

@Account Closed , first off, if the deal doesn't pencil out when accounting for professional property management, it isn't a deal. Don't cheat on this.

Long distance landlording sounds like a nightmare and I'd never even consider it. This is why property managers exist. If you do without a PM, you have to establish a solid team that you trust completely. It's not just collecting rent and the occasional drywall patch. Someone has to go over at 2am when there's a roof leak. Who's going to do that for you? A handy man? Maybe, but what about when he's out of town or working on another job or it's his anniversary?

Don't tempt fate.

I bought new construction last decade.. and for those I was able to self manage or should I say my secretary at the time took care of them

we would have a real estate broker place the tenant for a commish.. then we had a very good handy man on speed dial.

being new construction these were A class with A class tenants.. so managing them was not that tough.. 

and the houses being new at least for the first 10 years we had them were just normal turn over costs at move out.

I had one tenant stay the entire time I owned it.. that was nice.. 

So if your tenant base was like mine on these houses all 700 plus fico's .. basically white collar type workers looking for the nicest place in town and the best schools .. it can be done.

Anything short of that .. or like right now we have one project that is going to collage kids by the room.. that needs management

@Jaysen Medhurst , Thank you for the response. That is my primary concern. The amount of management I would still need done in my absence. The numbers, at least my preliminaries, work with management but obviously would be better if I self-managed. I do have a local contractor I’ve worked with a lot that has crews enough to take care of those needs but managing from a distance has its limitations even with a couple people in play. 

@Jay Hinrichs , I appreciate the advice. The homes would be class A in class A neighborhood. Just sold a spec there and seems to be a community of upper middle class, not really white collar. Great school and very family friendly town. I like the idea of tenants with over a 700 fico. Would there be any other parameters you would require? Also who else would you want on speed dial if you were to manage from a distance?

Thank you again. 

Originally posted by @Account Closed :

I am new to the rental portion of RE investing and am analyzing the following deal. This is a basic overview as the numbers aren’t important to my question.  6 New construction single family rentals. 2 bed 2 baths renting at approximately $950. 

I am considering managing them myself to keep my cash flow up. However my family and I are planning to move shortly after the build out of the lots. If I was staying it would be a mute question but with the move would it be advantageous to do my own management or is this an aweful idea being that I am new to property management?  Any advise on how to manage from a distance, from those thinking it may be a viable option would be appreciated.

Thank you

 Lots of new folks think that removing the property manager saves them money. Often times it does just the opposite. You being out of state and brand new is likely to be one of those times.

Originally posted by @James Wise :
Originally posted by @Ben Baye:

I am new to the rental portion of RE investing and am analyzing the following deal. This is a basic overview as the numbers aren’t important to my question.  6 New construction single family rentals. 2 bed 2 baths renting at approximately $950. 

I am considering managing them myself to keep my cash flow up. However my family and I are planning to move shortly after the build out of the lots. If I was staying it would be a mute question but with the move would it be advantageous to do my own management or is this an aweful idea being that I am new to property management?  Any advise on how to manage from a distance, from those thinking it may be a viable option would be appreciated.

Thank you

 Lots of new folks think that removing the property manager saves them money. Often times it does just the opposite. You being out of state and brand new is likely to be one of those times.

 Lots of old folks think that avoiding a property manager saves them money. Often times, it does.

Originally posted by @Terrell Garren :
Originally posted by @James Wise:
Originally posted by @Ben Baye:

I am new to the rental portion of RE investing and am analyzing the following deal. This is a basic overview as the numbers aren’t important to my question.  6 New construction single family rentals. 2 bed 2 baths renting at approximately $950. 

I am considering managing them myself to keep my cash flow up. However my family and I are planning to move shortly after the build out of the lots. If I was staying it would be a mute question but with the move would it be advantageous to do my own management or is this an aweful idea being that I am new to property management?  Any advise on how to manage from a distance, from those thinking it may be a viable option would be appreciated.

Thank you

 Lots of new folks think that removing the property manager saves them money. Often times it does just the opposite. You being out of state and brand new is likely to be one of those times.

 Lots of old folks think that avoiding a property manager saves them money. Often times, it does.

 If they've got the skills to do that job, sure I can buy that. If they don't though, they are just running in circles trying to save money while burning it up.

If your new and don't have written screening criteria , an application, a strong lease... tough starting out self-managing in your backyard.  No, I absolitely wouldn't  long distance do it if I was new.

Thank you for the responses.  I think I will pursue the acquisition of more property rather than the management side of things at this time. I do have a few PM’s to choose from.