Hello all. Hope everyone has kept themselves safe. I'm new to the world of real estate investing. I live in Manassas, VA- a pretty western suburb of DC. My issue when trying to run numbers on potential deals is that the best areas for rent-to-asking price ratio seem to be about 1-1.5 hours away from me. It seems positive cash flow is POSSIBLE closer in to the city, but with not a truck load of cash, the best places for me appear to be out toward the interstates. I'm looking either SFH or small multi-family. My question is whether or not it is possible, (read “logical”) to invest in property I intend to manage without a pro, that is not just a quick drive away. Does anyone have success with this or am I better off finding a property manager?
Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
6y
It's definitely possible. I'd travel out of country over 30% of the year, and still managed to run everything just fine as all my operations were streamlined. In the last few years I only forced myself to go visit due to paranoia but otherwise there was no need. Have your tenants direct deposit all funds into your bank account, do not personally accept any cash/checks. All documents via Docusign/electronic signature. All maintenance issues, have them explain the issue via email with pictures and a description. You can then use the pictures/videos and summary to get quotes for big jobs, or just call a local handyman to do the work. For these small jobs I've used craigslist guys and have been mostly fine, but you can use a more reputable company and pay a bit more for the comfort if you wish. All coordination was done over the phone, email, or text.
Now the few times are if you need to file for eviction, go to court for any reason (e.g. violations), showing the property to new tenants, renovating between tenants, or need to go to the city/county office for filing documents/payments (if they are archaic and don't allow for mail-in/email), then you may need to drive down once in a blue moon. Otherwise, for those minor items, you could partner with a property mgt. company. I actually had a little deal with a PM where I would pay him $50/hr for a quick drive down to check on the properties, take pictures of condition, file something at the city, etc. as a contingency plan in the case I was overseas and couldn't do it myself remotely.
So is it possible? Definitely. It just depends on where you stand in the spectrum of passive investing vs. making every single penny you can on the property. I chose being more passive with a lot more peace of mind, but by operating my business the way I did I managed to only leave very little on the table.
Lakewood, CO · Member since 2015 · 1 post · 0 votes
6y
We live in Colorado and self manage a SFH in Florida. We have a home warranty so if there are any issues, we just place a call with them. They already have the connections in place. We then just keep track of who they used and if we need anything done that is outside of the warranty, we have someone we are already familiar with that we can contact.
I like the idea of using the smart home technology that was mentioned.
Rental Property Investor · Long Island, NY · Member since 2018 · 19 posts · 6 votes
6y
@Jeff Alwine
Hi, I manage my rental property from out of state. The property is in Texas and I now live in New York (wasn’t my plan but that’s how it worked out). I’ve had the property for a year now. I’ve found that it is MUCH more difficult & more costly to self manage long distance, but if it is worth the deal, than I suggest you get it done. Developing good systems in place reduces the need to make personal visits.
Also, 1.5 hours is not that far of a drive, I’d use the time to catch up on BP podcasts :).
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
6y
@David King You make all very fair points, if and that's a very risky IF, everything goes as planned. Wait until you have a fair housing dispute or perhaps you handle rent payments improperly during a COVID-19 pandemic or what if that unlicensed handyman you're using gets hurt or even worse yet hurts someone else? Any lead paint in your properties? Are you sure are you using the proper disclosures? Do you allow pets, if not how do you know they aren't bring in pets later? And that leads to Service Animals vs. ESA's do you know?
Some of my vendors offer Property Management discounts, guess what, they are passed on to the owner. Yes I charge a fee for handling maintenance and repairs but it's stated up front and well worth it when you weigh out the fact that I take the tenant calls, I call the vendors, I screen the vendors, Follow up with tenants and vendors to make sure the work is done, I call you if the amount exceeds my predetermined limit. Then I process the bill to make sure the vendor is paid and you get proper records to back it up. At the end of the year I send out 1099's to all of the vendors.
I don't think you really know how much a good PM does for you nor do you understand how much risk you are taking on because you haven't been educated or continue to educate yourself on the laws involved with managing rentals.
I'm sorry everyone, that was a bit of a rant but Mr. King needs to do a little more research before he slams me and my
risk is relative. I have time to scuba dive to 400ft, cave dive and drinking and driving desert cars in the dunes at night going 60+, mountian biking, four wheeling, ect. Not everyone's pay off but its mine. Didn't mean to slam you Dick, lol.