Is landlording, especially from out of town too much of a hassle?

25 Replies

I was talking to a relative, about my interest in being an out of town investor and what this person had to say was pretty negative - this person was saying that it is alot of hassle to be a real estate investor and landlord, particularly, an out of state investor/landlord, even with management companies - have you found this to be true, including for out of state investors?  This person said he/she preferred to sell his time for money and even gave up real estate deals to avoid the hassle - yet this is what many of the Gurus such as Robert Kiyosaki teach against - selling time.

I've read on some of the forums here that it could be much hassle if one can't locate a good property management company.  But there are so many success stories in real estate in terms of wealth building, it would seem that real estate investing would be preferable to earning one's money as an S - a small business owner selling one's time.

Mariama,

I would not want to be an out an of town landlord, personally. It would make it too hard for me to be an attentive, hands on landlord,  but if I were to end up with a place out of town, I would spend alot of time and research on getting a great property manager. 

My main question: why out of town? You may have a very strong rental market in your area (but maybe your prices make it harder for property to pencil out? in which cases adjacent counties may be an option). I don't even like to own rentals on the other side of town--much less out of town rentals, personally. 

But, for example, if you found something along your commute, or close enough for do-able oversight, that may be possible.... Best of luck...

Thank you Michael -well, for the most part, I'm priced out in my area if I'm looking at the MLS, unless I get into looking for leads creatively - which I will consider trying. I also liked the Kansas City, MO market - I heard on podcasts that it has a diversified, strong economy - and the property values are much cheaper than in my area.

@Mariama R. Yes. That's why you don't want to be a landlord. You want to be an investor. They are two different things. Equity funds like Blackstone that owns over 40,000 single family homes aren't landlords. Investors hire good property managers to handle all of the "landlord" activities of managing the property and the tenants. Many people successfully invest out of state.

I'm in the Montgomery County MD area and looking searching for a good deal, but with the prices  being so high in our area looks like investing out of town/state might be the only way to invest.
@ Mike D'Arrigo how much  and how do these property managers charge?

Thank you Mike and Malik for your posts - yes, this is what I thought - that there was a difference between being an investor and a landlord - this person made it sound as if an investor would invariably be called by the property management company in the middle of the night and would still have alot of hassle with management of the properties.

Yes, Malik - I started to look for some deals in Maryland and they are very expensive, maybe a little less than DC -I was listening to a podcast that said that DC is one of 4 markets where usually only the most established and richest investors invest due to the high barrier or entry in terms of property values.  I did come across a nice duplex in DC for 109,000 - but it had only been on the market for 2 days before it turned to the "pending" status due to a contract being placed on it- I can imagine with properties like these - there would be bidding wars.

No, it's not too much hassle.  Just get a good property manager.  That means you're going to have to put as much effort in finding and screening property managers as you do evaluating properties.

For some people, it is too much.

First, if you are knowledgable in property management, it is possible to do on your own, but you have to be prepared to deal with this from afar.  We have a few, luckily with long term tenants in them, however, when we do have turnover, we fly out there, fix up the house and rent it out.   Over time, we have handed most of them over to property managers, since it is hard to find a replacement tenant in a weekend, etc. 

Property managers are knowledgeable of the housing laws, do thorough background checks, and overall are well worth the money for handling repairs, tenant issues, turnover, etc. 

Unless you want to be a hands-on landlord and do everything yourself , out of state is as good as in state.  I manage homes in Southern California for many people who live locally and just dont want to deal with the possible headaches of landlording.  On the other hand, my parents to everything themselves, so they only consider buying locally.  You have to see what is right for you. 

It is very doable. Just talk and interview several property management companies.  I pride myself on being a property manager who owns homes myself, so I really know what the investor is looking for in a property manager.

Best of luck to you!!

@Mariama R. I have been a landlord out of state in the past. I had a very easy time with one tenant. He just deposited funds right into my checking account every month. If something needed repairs he called someone out to repair it and deducted it from rent. He supplied receipts. On the flip side I had other tenants who could not afford to pay anymore so I had to find an eviction attorney and that was a lot of work. I now use a property manager for my rentals out of state. The key is getting a good one as I had to let one go late last year but now I have a great one. You just need to get some referrals to some property managers and call them and see who seems to fit your needs the most. They usually charge 10% of rents which is worth it for a good one.

Thank you all for your posts. Is it possible to get a good property manager if one is looking to buy an investment property in what may be an area that has been described as "not a very good area" -and hence maybe a C or D neighborhood?  The current property I'm looking to buy has a property manager and I've read the reviews of this PM and they are not that good.  I called another property manager and he said that his company does not manage properties in that neighborhood -he mentioned the price point is low that I'm paying for the property of 40,000 dollars or less.

To Malik - thank you, this is a good suggestion.  I have looked at a few but not as many in Baltimore, but will start to look for more properties in Baltimore.  What I seem to find is that most of the properties that are low priced are up for auction and require extensive rehab.  I was told by an agent that there is alot of competition for properties at auctions in Baltimore.  Right now I was looking for something more turnkey and low priced for my first property.  I am interested in rehabbing properties on down the road -but I feel I don't know about this that much yet and it makes me uncomfortable on my first buy.

One of my properties is about 45 mins from where I live. So while I am the "landlord" I have a local team (plumbers, handymen, electrician, etc) that take care of any issues that come up.  This allows me to stay in control of the money (rent) while saving on the property management fee's.  When it does come time to place tenants, I put out several adds during the week and then schedule an open house where I set appointments every half hour with people who replied to the add.  By setting appointments and sending confirmation text messages, emails, and calls I increased the number of property visits significantly.  


@Malik Awan I am also in the Gaithersburg area.  How/ what are you doing to find deals in our area?  Dont give up on our local market as I have found some pretty good ones from SilverSpring all the way out to Hagerstown.  

In terms of what prop managers charge, I believe the going rate is 10% and one months rent for tenant placement.  

Originally posted by @Andrew Michael :

One of my properties is about 45 mins from where I live. So while I am the "landlord" I have a local team (plumbers, handymen, electrician, etc) that take care of any issues that come up.  This allows me to stay in control of the money (rent) while saving on the property management fee's.  When it does come time to place tenants, I put out several adds during the week and then schedule an open house where I set appointments every half hour with people who replied to the add.  By setting appointments and sending confirmation text messages, emails, and calls I increased the number of property visits significantly.  


@Malik Awan I am also in the Gaithersburg area.  How/ what are you doing to find deals in our area?  Dont give up on our local market as I have found some pretty good ones from SilverSpring all the way out to Hagerstown.  

In terms of what prop managers charge, I believe the going rate is 10% and one months rent for tenant placement.  

@Andrew Michael,

I'm just starting out, I have only bought one property ever and that is my PR at the moment. I have been in this area for the last 8 years, I'm mostly looking to do BRRR deals and see where it takes me.

I live in LA and have only bought long-distance. I truly have never run into a problem that I couldn't handle over the phone (even if that meant firing a PM company and hiring another one). I don't see what the big hype is about needing to be close to the property, unless you really are planning to landlord itself then yes definitely be close to it. But with PMs, who cares. 

The argument is true that dealing with PMs can be a hassle, but to me it's still worth it and if one PM company sucks, hire another one. I've done it.

Easy peasy! :) (and props to you for considering it because the prices in DC aren't really amenable to cash flow buyers. I've worked with quite a few folks from there.)

@Mariama R. Yes DC is an expensive market.....but there are plenty of very cheap properties in the area as well. Im not necessarily advocating those $20k properties, but they are there and there are investors buying them.  I really like Frederick MD for cash flow properties, as well as  Laurel MD.  Those are both very close to DC and have cheap entry points.

Also while DC is also expensive, it offers phenomenal chances for appreciation. Cash flow may be how we pay our monthly bills, but appreciation is how you really build wealth.  On top of that while appreciation can be generally hard to predict....gentrification can really point us in the right direction on appreciation plays.

Thank you everyone for your posts. Is it harder to find a property manager if you are buying a property in an area considered not a great area in terms of safety/crime or if the anticipated rents for one's investment property are around $1350 or less per month?  I definitely do not want to landlord from out of town.

I guess if one wanted to find properties in DC, one would probably have to resort to creative leads - maybe mass mailings to houses?  

What about Frostburg, Maryland in terms of real estate property investment?  I saw a nice fourplex there near Frostburg State University- however, Frostburg, Maryland does not seem to have much industry other than the University.

I own property in Frostburg Maryland. As always you would want a local person to give you the low down. You can contact me for specfics. I manage my own property so I wouldn't be able to give you ideas for property mangement althought there are options available. The major play would be school students. The industry is the university. :) 

A huge factor is where you can buy, as cash is your limitation and whom you trust to manage your property. 

I have three properties in Australia and I live in Cleveland. My one major headache was not tenants but firing the property manager cause he wasn't doing his job. So don't always think tenants are going to be your issue

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