I just bought a new house in Austin and I live in Washington. I'm wondering if anyone has been doing the same thing(or similar) and has any tips regarding management. I'd love to hear from people who manage out of state rentals personally or if you use a management company.
Hi @Joshua Dombal , congrats on the property!
Plenty of landlords manage their rentals from out-of-town. Others choose to hire out property management instead. It comes down to your comfort levels.
If you wish to self-manage, here are some tips.
- Leasing: Without a doubt leasing will be the hardest aspect of managing out of town, for obvious reasons. Unless you travel to the property, you will not be able to host open houses or do viewings yourself. The trick is finding a leasing agent and paying them. The leasing agent can handle the entire leasing process or you hire out the local-specific tasks (i.e. showings, walk-thru's, etc.)
- Maintenance Team: You don't need to be local to be a maintenance coordinator; the person who handles scheduling and requesting proposals. Find a great handyman so you can call up for minor issues and tenant turnovers.
- Tenant Turnovers: This will require trust or travel, your choice. You can hire inspectors or agents to view the property for move-out inspections and then coordinate with
- Rent Collection: With modern technology this is all done digitally. You can find payment apps (i.e. PayPal, Zelle, Vemno, etc.) or landlord management software (i.e. Cozy, Burbz, TenantTurbo, etc.) that offer rent collection features.
- Landlord Software: There are several options for companies that provide software to landlords who want to self-manage. Free and membership-based options. They offer most of the management tools you will need but being out of state might require additional resources.
If you are considering the option of hiring a property manager instead, things to consider:
- Returns: Hiring a property manager typically diminishes your returns. I say typically because if it's a lower class of tenants then PM's earn every penny they get collected from tenants.
- Hands Off: If you're going to hire a PM then do it right with a professional. Then let them do their thing and don't micro-manage. If they aren't living up to their end of the bargain, send them a notice for breach of contract.
- Interview: It's important to interview several PM's. Get a good understanding of their fees structure and policies for late rent fees, evictions, late notices, landlord checks, etc. Ask about their tenant turnover process.
- Rates: Monthly management fee isn't the end-all-be-all. I alluded to fees structure previously. Some PM's offer eviction policy or a tenant placement guarantee. It's not uncommon for a PM with lower 'rates' to end up costing you more money. Some PM's use their low rates as a marketing strategy and make up revenue elsewhere. Nothing wrong with that approach as long as you are aware of all their fees.
I wish you the best of luck!
@kenny dahill made a bunch of excellent points, but I'd like to add one: since it's a new home, you probably won't run into too many issues beyond the initial lease (as he mentioned), and that will be fully handled by the leasing agent. I don't usually recommend managing your own property from out of state, but in your case it might be pretty doable.