Out of State Property Management

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Out of State Property Management

Erica Davis
New to Real Estate · WA · Member since 2025 · 9 posts · 16 votes

What do I need to look for when screening a property management team or company as an out of state investor? Are there certain positive or negative things I should look out for?

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Stephen FisherPro Member
Rental Property Investor · Costa Mesa, CA · Member since 2017 · 26 posts · 16 votes
1y

I agree with everything @Caleb Brown said above.

One thing that I feel is overlooked and not pushed enough by PM is renewing leases and tenant retention. See how often they are able to retain tenants and what their strategy is for keeping them in place for multiple years. Turning units costs money on so may fronts and most PM companies are not motivated to have long term tenants. 

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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    1y

    I would see how many doors they manage. I tend to see larger companies have less hand holding for your property. You are not going to be a property managers only client but you want to make sure they communicate with you. Ask questions on their fees, do they charge you for filling the property, what do they do/charge for handling maintenance or repairs. Do they have in house people or do they hire it out? Do they need approval or is there a certain threshold ($500, $1,000, etc)? Check how they screen tenants, where do they market properties, what is their criteria for a tenant to rent a place.  

    2Reply
  • Stephen FisherPro Member
    Rental Property Investor · Costa Mesa, CA · Member since 2017 · 26 posts · 16 votes
    1y

    I agree with everything @Caleb Brown said above.

    One thing that I feel is overlooked and not pushed enough by PM is renewing leases and tenant retention. See how often they are able to retain tenants and what their strategy is for keeping them in place for multiple years. Turning units costs money on so may fronts and most PM companies are not motivated to have long term tenants. 

    3Reply
  • David PeschioBusiness Member
    Richmond, VA · Member since 2019 · 358 posts · 181 votes
    1y

    Screening tenants is the most important part of the process.  The wrong tenant or tenants is a nightmare.  Find out the screening criteria and also how they market.  After that get a copy of the lease and addendums to see what rules are regulations they require enforce.  Lastly, how do they communicate with owners (portal) and examples if the financials they supply.

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  • Zach F.Business Member
    Property Manager · Cincinnati, OH · Member since 2016 · 82 posts · 55 votes
    1y

    The #1 thing I would be digging into is how many units per employee do you guys have?

    Having done PM for a long time now, if I were to hire someone out of state if I were to ever invest outside of our markets we manage in, I think you can honestly gauge how good or bad your experience will be with this simple question.

    Industry averages show across the country that on average a property management company has about 100 units per staff member.  My company runs about 20 units per employee.  The #1 complaint we get from new clients or prospective clients that reach out to us after having a bad (or multiple bad) prior PM experiences is always poor communication.

    The root cause of poor communication from your property management company is due to them being improperly staffed.  The reason your unit(s) have been sitting on the market for 2+ months could also be attributed to a poorly staffed property management company.

    I really think the answer to this question will tell you a LOT about what your experience will be like as an out of state investor.

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  • Parris Taylor
    Investor · New York, NY · Member since 2025 · 92 posts · 71 votes
    1y

    @Erica DavisBe mindful that you’re not hiring a personality, you’re hiring a system.

    Predictability beats charm every time.
    The best managers are kind of boring. They don’t chase drama, they prevent it.

    Test their response time before you hire them. If they’re slow with you, they’ll be slower with tenants.

    Ask how they handle repairs and if they profit from every maintenance ticket. 
    A great manager doesn’t make your life easier… they make your property invisible.
    You stop hearing about it. Rent just shows up.

    That’s when you know you found the right one.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    @Erica Davis

    We’re a Property Management Company (PMC) in Metro Detroit ONLY, with 25+ years of experience, and we’ve seen owners make the same mistakes, over & over again when looking to hire a PMC – which drives us nuts!.

    In our experience, the #1 mistake owners make is ASSUMING all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY.

    So, owners mistakenly think price is the only differentiator – and look for a PMC like they’d shop for groceries☹

    We encourage you to learn from the mistakes of others by reading posts here on BiggerPockets from owners that picked a PMC solely by price and regretted it.

    We recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

    Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

    Even if someone gives you a referral, do NOT make the mistake of assuming that just because a PMC met their expectations, they’ll meet your expectations. We all have our own expectations and what works for someone else, may not work for you.

    If you’re new to all of this, it's often a case of not doing enough research, as you don't know what you don't know!

    So, ask more questions!

    EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

    This also leads owners to ASSUME simpler is better when it comes to management contracts.

    The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

    A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

    We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

    EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

    P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

    Here’s some articles we’ve contributed to BiggerPockets about screening a PMC BETTER than you would a tenant!

    20 Questions to Ask When Vetting a Property Management Company: Processes

    13 Questions to Ask to a PMC: Communication and Documentation

    24 Questions to Ask When Evaluating a Property Management Contract

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  • Allie McAlister
    Memphis, TN · Member since 2024 · 180 posts · 223 votes
    1y

    Hi @Erica Davis

    This is a great question — finding the right property management team is crucial, especially when you’re investing from out of state. A few key things to look for:

    Clear communication systems — ask how they handle owner updates, maintenance approvals, and tenant issues.

    1. Tenant retention & screening — as others mentioned, long-term tenants are gold. Make sure they have solid screening criteria and renewal incentives.

    2. Transparency — look for a PM that provides detailed monthly statements and isn’t hiding fees behind “maintenance coordination” or certain markups.

    3. Local expertise — choose a company that truly understands the rental market and has trusted vendor relationships.

      If you ever consider expanding your search to Memphis, our market has been fantastic for out-of-state investors — strong cash flow, affordable entry points, and I can connect you with a couple of reputable management teams that make remote ownership smooth. I’m an agent on Dean’s team at CrestCore Realty, and we work closely with property managers every day, so I’d be happy to share a few pointers or introductions if that ever helps!

      Best of luck!

      2Reply
    • Nicholas L.Pro Member
      Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
      1y

      @Erica Davis

      Hi Erica.  I'd go meet with anyone you're considering in person.  It has to be worth the trip if you're going to spend hundreds of thousands of dollars on a property.

      Hope this helps

      1Reply
    • Jimmy LieuBusiness Member
      Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
      11mo
      Quote from @Erica Davis:

      What do I need to look for when screening a property management team or company as an out of state investor? Are there certain positive or negative things I should look out for?

      Hey, great question and one that a lot of out-of-state investors overlook early on. When you’re screening a property management company, focus on communication, transparency, and how they handle maintenance and tenant issues—that’s usually what makes or breaks the experience. You want a team that’s responsive, clear about their fee structure, and willing to share references or sample reports. Ask how they handle leasing, tenant screening, rent collection, and evictions, and pay attention to how quickly they follow up with you—that’s often how they’ll treat your tenants too. I’d also look for someone who really knows the local market because having boots on the ground can make all the difference. For example, here in Columbus, Ohio (where I invest and now own 10+ rentals), good PMs know exactly which areas perform well for long-term rentals and how to price things right to minimize vacancy. Columbus is a great market for out-of-state investors because of its affordability, strong job growth, and landlord-friendly laws, but having the right PM here is key to making it truly passive. Happy to connect and answer any questions you have!

      [email protected]614-300-7535
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    • Nadeem Alamgir
      Real Estate Agent · Member since 2023 · 831 posts · 577 votes
      11mo

      @Erica Davis

      I’d start by vetting their systems, how they handle marketing, tenant screening, payments, fees, and maintenance. The reality is most PMs are busy and won’t drop everything to answer every question, but they should at least be willing to schedule an intro call and walk you through the basics. If they can’t do that, it’s a sign to look elsewhere.

      2Reply
    • Marcus Auerbach
      Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
      11mo

      Generally, what you pay is what you get. A cheap PM has to cut corners in order to turn a profit. The right questions revolve around people and process: 

      What's the staff-to-unit ratio? 
      How robust are their processes? Screening and maintenance are the two big ones.

      Beware of PM's who lure you in with a low % rate and (have to) make it up with fees and markups on the backend. A good PM can not operate profitable below 8% (or by charging you excess fees to make up for it).

      2Reply
    • Remington LymanBusiness Member
      Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
      11mo
      Quote from @Erica Davis:

      What do I need to look for when screening a property management team or company as an out of state investor? Are there certain positive or negative things I should look out for?


       I would see which one responds quickest to you. Please note that this will probably be via email. I would also try to start with a few different ones if you have a small portfolio so you can see which one performs the best. You should also expect to manage your property manager closely for the first few years until you get comfortable with them. After that I would still check in on them quarterly. Just be careful not to annoy them too much

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    • Carlos Hennings
      Lancaster, NY · Member since 2021 · 92 posts · 53 votes
      11mo

      When vetting a property management company, especially as an out-of-state investor, it’s critical to approach it like you would any other major investment decision: verify, document, and confirm. Here are a few key areas to evaluate:

      1. Transparency & Communication

      Ask how often you’ll receive updates (monthly reports, maintenance logs, rent rolls).

      Confirm that they have an accessible point of contact, not just a generic inbox.

      Watch for vague answers around communication frequency or reporting access.

      2. Screening & Tenant Placement Process

      Request specifics on how they screen tenants: Are reports FCRA-compliant? Do they verify income, employment, and identity?

      Look for providers who use manual review with verification tools (e.g., Argyle for income/employment, Cerebrum vID for ID verification, Trigo for rental history). These methods reduce fraud and speed up approvals.

      Be cautious if they can’t explain how they prevent or detect fake paystubs or altered IDs—this is a growing issue in property management.

      3. Compliance & Licensing

      Confirm they’re licensed in the state where your property is located and that they understand local housing laws (Fair Housing, habitability, security deposit handling, etc.).
      ___________

      A quality management team should be able to clearly explain how they protect your assets, minimize vacancy, and maintain compliance. If they can’t, that’s a sign to keep interviewing.

      2Reply
    • Alicia SierraBusiness Member
      Real Estate Agent · Saint Louis, MO · Member since 2015 · 132 posts · 70 votes
      11mo

      These are all amazing replies!  Here is a list of screening questions we share with our clients: 

      https://docs.google.com/document/d/1e3kRstB7QeZ_a-OEznovs8Zw...

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    • Ashish AcharyaBusiness Member
      CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
      11mo

      @Erica Davis 

      As an out-of-state investor, choose a property manager who is tax-literate: They need to understand the material participation rules, and they should coordinate with you if you plan to meet REPS or STR. Confirm they preserve decision logs and exportable communications to evidence your involvement.

      They should collect your W-9 and use your EIN, have a written 1099 policy for vendors they pay as your agent, register and file all applicable state and local taxes (sales/lodging/occupancy, business licenses, any nonresident withholding) in your entity’s name, and keep security deposits in a separate trust account. Demand exportable monthly statements with GL detail, vendor names, and invoices so your CPA can distinguish repairs vs. improvements, apply Tangible Property Regs and the de minimis safe harbor, and coordinate cost-seg and partial asset dispositions.

      For short-term rentals, they must track nights, owner use, and services separately and reconcile platform 1099-Ks to prevent double-counting. Insist on a year-end tax package, clear classification of reimbursements vs. income, audit-cooperation language in the contract, and guaranteed data-export on termination. Clarify who is the employer for on-site staff and require W-9s plus insurance from all vendors. Walk away from anyone who says Airbnb pays all your taxes, can’t explain local filings, commingles funds, or won’t provide invoices and a proper year-end package.

      This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.

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    • Elealeh Fulmaran
      Specialist · Member since 2025 · 483 posts · 270 votes
      11mo

      Interview like a pro and read between the lines: ask for specifics, not sales talk. How many doors do they manage, max capacity, and who’s on their team? Show me the software they use, sample owner reports, and their maintenance process, markups, and approval thresholds. Walk through their tenant screening criteria, rent-setting strategy, and exact eviction workflow step by step. Verify fees in writing and what’s included, plus takeover costs and inspection cadence. Ask for two investor referrals with similar assets and confirm stories match. Red flags: vague answers, Excel-only ops, slow communication, and “we handle it” without details. If they can’t scale with you, keep looking.

      2Reply
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