Long distance landlord needs help deciding...

20 Replies

Hello:

I recently moved to Texas from Connecticut but my properties obviously did not. I had my brother doing property management but that will be ending after this month. I am really struggling to decide whether or not to:

  • Hire a full time property manager. I have heard a lot of horror stories and giving up 10% is not a huge turn on.
  • Manage it myself but find someone to show vacant rooms and fix leaking sinks.
  • Do somewhat of a hybrid. For example, securepayone.

I like things done a certain way and am not good at giving up full control. I have a few properties in CT but the ones that would potentially need management are in New Britain. I am also looking to buy more properties soon, so the issue of scaling is important.

Any help or insight would be much appreciated!

-Ryan

Since it sounds like you do not want to give up control and are not crazy about paying the 10% I would go with the 2nd option for the time being and see how it goes. 

If it becomes to much to handle then hire a PM for the properties that give you the most issues. 

@Michael Noto Thank you. That is what I am leaning towards. It is the struggle of finding reliable people that will be hard. However, that is part of the game. Appreciate your input!

Ryan, are you buying properties in TX or CT? Maybe it's time to reallocate, sell what you have in TX to buy in CT?

@Anthony G I lived in CT my whole life and moved to TX about a year and a half ago. I have properties in CT that were purchased while I lived there. I really like them and do not want to sell. I am just trying to figure out how to manage them from TX.

Originally posted by @Ryan Deasy :

Hello:

I recently moved to Texas from Connecticut but my properties obviously did not. I had my brother doing property management but that will be ending after this month. I am really struggling to decide whether or not to:

  • Hire a full time property manager. I have heard a lot of horror stories and giving up 10% is not a huge turn on.
  • Manage it myself but find someone to show vacant rooms and fix leaking sinks.
  • Do somewhat of a hybrid. For example, securepayone.

I like things done a certain way and am not good at giving up full control. I have a few properties in CT but the ones that would potentially need management are in New Britain. I am also looking to buy more properties soon, so the issue of scaling is important.

Any help or insight would be much appreciated!

-Ryan

Man, I hear where you are coming from. I like things done a particular way, which is usually the right way. There are too many folks out there cutting corners, especially when no one is watching. 

I agree with Mike. Try to self manage it from a distance, but if that doesn't work out, get some boots on the ground. I'm willing to bet that not having boots on the ground can be as destructive as having a bad PM. If you do go the PM route, find someone who will be able to offer a tailored service specific to you and your properties. Some of my Property Management clients only want a check each month and could care less about the details. Other clients want to know about every minor repair. I'm happy to provide either service. Different strokes for different folks, you know? 

Hey on the bright side, at least you didn't get 10 inches of snow yesterday ;)

Hire the PM. You'll spend more than 10% of the value working on this anyway if you self-manage

being able to successfully delegate - that's real control

@Filipe Pereira and @Alexander Felice thank you so much for your advice. it looks like I may start out trying to do this myself and piece together a team consisting of a handyman, someone to show vacant rooms, etc. I have no doubt that you guys may be right in saying a PM is the way to go. I am going to test my plan out and then switch over to a PM if it gets to be too much. 

There is no easy solution to this situation--long-distance management is usually problematic, especially depending on unknown property managers if ;you can't get good referrals from other owners. 

One thing that we do re maintenance is to have all contractors take digital photos before, during and after the job.  They email the pix to us along with the invoice.  We confirm with the tenant the job is done and all is working properly.  Then we cut check to the vendor.

Good luck.

@Ryan Deasy I was also thinking about being a long distance landlord. As I was doing research on the possibility, I came across companies that seemed to make the process easier. One, in particular, is Cozy. It allows you to collect rent online, screen tenants, etc. Aside from having your properties shown and having a relationship with a good handyman,  automating other processes like collecting rent would make your job easier to self-manage your properties from a distance. Hope this helps.

Long distance investing come with having to give up degree of control. You must still manage your PM so not all control is gone.. Hire a PM and if it does not work out then sell.

@Ryan Deasy Hire someone!  But I'm biased in that I use a PM for my out-of-state properties.  Heck, I'd probably use one if I owned something 20 minutes away from me.  That said, my reason is that I think my particular path is good for you to follow.  Rather, if you *think* you want to use a PM then use a PM.  There's 100's of people on BP that hate the idea of giving up 10%, want to manage themselves, are happy to do it remotely, don't mind the occasional call from a tenant, etc.  If you aren't 100% sure that's what you want to do then I'd pay someone 10% with a year contract and see how they do.  You could have a "bad year" either way when it comes to self-managing or using a PM.  There's no riskless solution for absentee owner risks, it comes with the territory.  BUT if you do find a good PM then you've set yourself for some years of low(er) hassle remote landlording.  And if you do find a good one it lowers the hassle to find subsequent properties in Texas so now you have to "easy" markets (Texas and Connecticut) to grow your portfolio in. 

@Marc Winter , thank you. I love the idea of actually getting the before, during and after pictures before cutting the check. I will be implementing this going forward.

@Anthony Markey this is literally exactly how I am thinking right now. I have investigated Cozy in the past. it is a great platform. I am considering using square cash and venmo though. they are free services, and I am fine with just updating an excel spreadsheet. I am not sure what sort of record keeping Cozy does, but I am sure it is probably pretty good. in the future, as I continue to grow, I am going to strongly consider getting a more official means of collecting rent. most of my tenants use the two services I mentioned, already. For their ease of use I think I am going to go with that for now. 

@Thomas S. I completely agree. However, until this fails I think I am going to attempt it myself and then go the PM route. Worst case I will sell.

@Andrew Johnson I agree there is no riskless solution. for the amount of properties I have right now, I think I do it from afar. I put an ad out on craigslist for a handyman and my email and phone are blowing up. some even have some leasing experience/ability. I am the type of person that needs to fail at something before I learn. so I guess we will see. 

Thank you everyone for your input. It all means a lot! 

@Ryan Deasy . I own a rental property company which actually services the New Britain area. We pride ourselves in actually making a higher ROI for you after paying our fees by the following:

Leasing while the property is occupied reduces our vacancy period by at least two weeks (we actually do 0 day turns).  This covers the leasing fee (or probably a full year of management) right off the bat.  

We partner with quality and cost effective vendors (saving you time to call and try to negotiate lower rates from afar).  

Because we are proactive with our maintenance and repairs, our tenants stay longer (saving you further leasing fees).  Also because we represent you, we only put in tenants that meet your criteria (which is hard if you are only giving an agent leasing because they only want to get it done quickly).

We also do other value add things like providing you yearly summary statements, leasing only in the summer months to maximize rent (do you really want to trust a tenant that needs to move on January 1st?), working with attorney's that specialize in evictions to minimize vacancy periods and the list goes on.

We do make ready repairs on a moments notice so that we can maximize your rental on each turn.

A good property manager should take away the headaches and pay for themselves in different ways that are impossible to evaluate in these spreadsheets (I should know since I own 16 rental properties).

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@Melissa Gittens i ended up self managing and, to be honest, i love it. at first, it was a bit difficult. at this point i have systems and a good team in place. i have a great handyman, lawn guy, snow and cleaning person. i actually am headed back to CT today and believe i will be at the meet up you post about next Tuesday!

@Samuel Eddinger thank you for reaching out! for now, i enjoy self managing and am making it work. i do completely
realize if i am to achieve my goal of a few hundred or more units, i will eventually need to hire a property manager. for the properties i have now, i can handle it myself. i am headed back to the area today and will be looking at more properties on saturday. once again, i really appreciate you reaching out and will keep you in mind when i do finally make that shift.

@Ryan Deasy - sounds good.  I wish you luck as you continue investing.  Just remember when your properties are running smooth, no one needs a property manager.

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