Can I manage my out-of-state properties myself?

Question

I recently purchased my first two SF rental properties out-of-state (I live in CA, they are in Fort Smith, AR). My best buddy in Arkansas was my point person on the ground, and helped me buy them and has managed them so far while we've been learning REI. But my buddy has accepted a job in Florida and won't be able to continue managing them. We knew that might happen.

I have great tenants for both, and most of the maintenance/rehab items they needed are taken care of for the moment. I have a handyman I really trust, but other than that, I won't have anyone on the ground anymore. How crucial is that? My friend makes the argument that there's not much he's doing for me that I can't do remotely (call a plumber, etc.). I read David Greene's book on Long Distance Real Estate Investing, but it didn't really talk much about managing, and definitely not about managing remotely. I'm thinking about regular maintenance (smoke detector batteries, furnace filters, etc.) as well as the urgent calls that could happen.

I've considered:

Hiring a commercial property manager (don't like this idea, but it's on the table)

Using Thumbtack.com on an as-needed basis

Hiring an enterprising college student, and incentivizing him/he to learn REI and connect with me as needed. Like an internship.

Is this crazy? If any of you have done what I'm asking about, I'd really appreciate hearing your thoughts on it.

Thanks!

Paul Kubin · Answer

@Mike Hern

That’s genius!

Account Closed · Answer

Picking tenants correctly is very important.

My tenants replace their own batteries, unclog their own toilets, mow their own lawns, change their own HAVC & pool filters and are repsponsible for the first $200 of any repairs. That all is written into the agreement. I don't have "day to day" items they bother me with.

I'm nice about it, but when they call I simply say "let's look at the agreement, yep, here on line 12 it says that is the tenant's responsibility. Now, I can take care of it for you but as you can see from the agreement that line 12(c) says the tenant will be given 30 days notice to move". They always say "thanks, I was just curious" and hang up the phone. It's funny but I never get a second call from them on small items.

Account Closed · Answer

If you have a handyman you trust just use him for referrals as you need them. Property managers make most of their money placing new tenants into the property. They usually get a month's rent for doing that. You don't want to incentivize a property manager to do a poor job and cause your tenants to leave. Some investors get on that hampster wheel and a good stable investment becomes a pain. "If it ain't broke don't fix it."

My properties are in various states with no property managers. I expect everyone to act like adults and they do. The occasional problem tenant gets booted and replaced.

Paul Kubin · Answer

@Mike Hern

Thanks, Mike. That’s interesting. I found both of my tenants remotely, and I think I did a very good job. It’s the day-to-day items that I can’t be there for. But I suppose if I can call a handyman, I’ll probably be OK. I even thought about asking my handyman if I could pay him to replace batteries, etc.

I think the last task I would want to give a property manager is picking out a tenant. It was hard, but the work was well worth it.

Can I manage my out-of-state properties myself?

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