Self-managing out of state: real move or expensive lesson?

Question

I self-manage almost everything I own, with a small team reporting to me, including an RV park here in Houston and short-term rentals about three hours east. Every time I price out handing it off, the 8-20% management fee (depending on whether it's long- or short- term) is the easy number to see. The leasing fee, the maintenance markup, and what a bad turnover costs are the parts that actually decide it.

My questions:

If you self-manage in a state you don't live in, what specifically makes it work? A handyman on retainer? A local agent doing showings for a flat fee? Software carrying rent and maintenance requests?

And if you tried it and went back to a property manager, what broke?

If you don't have any out-of-state rentals, are you still handing it off to a manager or handling yourself?

Numbers, if you've got them, make this even better! Best answers get featured in the BiggerPockets Investor Brief newsletter. Thursday edition this week

Drew Sygit · Answer

@Garrett Brown - I kinda take offense to a BiggerPockets staff member "feeding" the inaccurate mantra that, "no one will ever care about your property the way you do"😞

I can PROVE that we do a better job of managing than a decent portion of our owner clients.

Many owners are terrible at:- Applicant Screening - doing it by "gut feel".- Rent Collection & Evictions - letting tenants get too far behind- Maintenance - either spending too much on their rentals, like they are living in them, or ignoring maintenance issues and being slumlords.

The REAL problem is too many investors picking TERRIBLE property management companies and then stating ALL of them are terrible.

So, why are you feeding this inaccuracy?

Jimmy Lieu · Answer

Great question, Garrett. I think the biggest factor with remote self-management is having reliable boots on the ground. Software can handle rent collection, leases, communication, and maintenance requests, but it can’t meet a contractor, check a repair, handle a lockout, or figure out why a turnover is taking twice as long as expected. If I were self-managing from another state, I’d want at least one dependable handyman, backup contractors for the major trades, and someone local who can handle showings or physically check the property when needed. I’d also compare the true cost of self-management against the full cost of a PM, not just the monthly percentage. One poorly managed turnover, unnecessary repair, or extended vacancy can quickly wipe out what you saved on management fees. For me, the question is less “Can I manage remotely?” and more “Do I have a local system that still works when something goes wrong?”

Bill B. · Answer

Garrett I use a PM in Vegas exactly because I don’t ahead those three problems. It’s $300 to place a Tennant, just over a week’s rent, very cheap. There’s no markup on repairs, in fact. I usually get a discount, plus more than 90% are handled same day.  And lastly the turnovers are waaaay faster and probably cheaper don’t by my PM than done by me. On average I would say 5-10 days, and my average tenant stays 4-8 years so there’s some work to be done. This is all done for 8% of collected rents.

OTH I do self manage my only out of state property.  The rent is my highest.  ($3,500) So even 8% is $280/mo. I probably woulda paid it. But I found a pm that charged 1 months rent with a guarantee of rent for 2 years.  That tenant has just renewed for 2 more years (year 11 and 12). It’s also a townhome where I have zero outside the walls responsibility.  I’ve replaced a microwave/fridge/garage door opener/springs in 10 years.

To me the screening is the most important part and the part I hate the most. At least in class a-/b+ properties.  Now my b/b- Vegas properties not only is screening important. But I think the tenant dealing with a PM with a portal and official system for everything gets treated differently than a mom/pop landlord.  They know late fees are tacked on everytime, pay or quit notices go out, etc etc.  Not stuff you couldn’t do yourself. But many of my tenants come from their website, so they’re a known product.  Anyway. I rambled. Sorry.

Candyce E. · Answer

I self manage a property in a different city (about 90 minutes from my home) and have a manager for a property in another state (8 hours away). In my experience, the property manager is less transparent, takes longer to find a tenant, does less due diligence (I'm very detailed with my tenant background checks), and is more likely to just charge me to fix something instead of expecting the tenant to pay (for example, breaking the garbage disposer by grinding up a shot glass). They also seem to prefer shorter leases. I do a 2 year as standard and it's like pulling teeth to get them to do the same.

I hate the lack of transparency and would prefer to self-manage, but I don't know the city and don't have a list of reliable contractors to depend on. (we chose the city because of the rental market there, not because it's somewhere we ever lived)

On the other side of this is maintenance. I fix things immediately when the tenant reports issues. But I am not as proactive as I should be on the property I self-manage. I'm not doing regular inspections because it's a PIA to make the drive. That tenant has been there 8 years, and I suspect that we're going to need to make a lot of repairs due to deferred maintenance (poor judgement on my side, I know).

The property manager is inspecting the other property every quarter, changing furnace filters, checking smoke alarms and checking for leaks. So the property is probably being better maintained.

So I don't know that there's a hard and fast answer to the question. Like most things, it depends. But my plan is to sell the out of state property eventually and get something closer to home.

Adam S. · Answer

My uncle once told me, “It’s never a good idea to be penny wise and pound foolish.” That advice has always stuck with me.

If you own a six-figure, or higher, asset and you’re hundreds or even thousands of miles away, trying to save a few bucks by not having a property manager may not be the wisest move. Sometimes saving a dollar today can cost you ten dollars tomorrow.

Now, property managers are a dime a dozen these days. The key is finding a proper property manager; not just someone who collects a management fee and calls it a day.

So, what makes a good property manager?

Experience matters. Look for someone with a proven track record who has been in the business for a significant amount of time.

A licensed broker should be in the driver’s seat. Not simply a real estate salesperson. There’s a difference, and it matters.

Proper insurance and documentation. They should have the appropriate insurance coverage and professional forms in place to protect both you and your property.

A detailed property management agreement. Everything should be clearly spelled out from A to Z. You should know exactly what they handle, what they charge, and what happens when something goes wrong.

Their own maintenance team is a major plus. Having people they know and trust who can handle most repairs can save time, money, and a whole lot of headaches.

Personally, I prefer a reasonable flat-rate structure rather than hourly billing, although that’s usually negotiable.

My reasoning is simple: if a property manager bills by the hour, there isn’t necessarily much incentive to get a repair completed quickly. If they charge a reasonable flat fee plus the cost of supplies, everyone has a little more incentive to get the job done efficiently and correctly.  Additionally, they should produce a copy of all materials to you to prove there are no mark-ups on the materials.

At the end of the day, managing a valuable property from hundreds or thousands of miles away isn’t the place to pinch pennies. The right property manager can protect your investment, save you time, and give you some much-needed peace of mind. The goal isn’t to find the cheapest property manager. It’s to find the right one.

Leo Stein · Answer

The monthly percentage is the easy number. What usually breaks out-of-state DIY is one hard turn, an after-hours emergency with no local eyes, or a vacancy that sits while nobody owns the outcome. Software and a handyman help, but they do not replace a local person who can meet vendors, verify work with photos, and keep leasing moving. In Orange County I also treat entry notice, habitability timelines, and deposit accounting as non-optional, because those miss costs more than the fee you were trying to save. If you do not have boots on the ground and a written spend limit, a local PM is usually cheaper than the first bad month. Happy to compare notes on SoCal ops if useful.

Igor Ganapolsky · Answer

I'm in a similar situation. I live in NJ but invest in Broward County tax deed auctions down in Florida. Been self-managing from 1,200 miles away for about a year now.

What makes it work for me:

1. A local handyman I found through Facebook groups. Paid him to do a small job first to test reliability. Now he's my first call for anything under $500.

2. For bigger stuff (HVAC, roof), I keep a short list of 3 licensed contractors I've vetted. Got their licenses verified through Florida's DBPR site.

3. Tenant screening I do myself through SmartMove. That's one thing I don't trust to anyone else.

4. Rent collection is automatic through ACH. Tenants never see me as the middleman.

The honest truth: what almost broke it was maintenance coordination. A tenant reported a leak at 11pm on a Tuesday. I'm in Jersey, it's their first place, and I'm texting a handyman who's asleep. Took me two flooded bathrooms to realize I needed someone on call, not just someone available during business hours.

Now I pay my handyman a small monthly retainer ($200) to be the first responder for emergencies. He shows up, assesses, and either fixes it or calls the specialist. Saves me the 8-10% management fee and I still sleep at night.

The numbers: I'm saving about $180/month per unit versus what a PM would charge. After the retainer and occasional flights down for inspections, I'm still ahead by $100-120 per door. Plus I actually know what's happening with my properties.

Danny Gonzalez · Answer

@Garrett Brown The monthly % is the easy number. What breaks OOS self-mgmt for most people is one bad turn or an emergency with no local eyes. If I were remote I'd want a retainer handyman, spend limit in writing, and photo proof before paying. When you priced full PM all-in (lease + markup + vacancy risk), what did it pencil vs your DIY team?

Jamaal Pratt · Answer

Garrett, I think the management percentage is often the easiest number to compare, but not necessarily the most important one.

I’m with Emerson Property Management here in Houston, and from the management side, I’d look at the total cost of self-management versus professional management. Vacancy days, quality of tenant placement, turnover costs, maintenance coordination, response time, delinquency, and the owner’s own time can easily matter more than the headline management fee.

For out-of-state self-management specifically, I think the biggest question is: what happens when the system breaks?

Software can collect rent and organize maintenance requests, and a good handyman can solve a lot of problems. But when the resident stops paying, the normal handyman is unavailable, a repair needs multiple vendors, or you have a difficult turnover, you need someone local who owns the outcome rather than just completing a task.

I’d be interested to hear from owners who have actually tracked the numbers both ways. The comparison between management fees saved and total operating performance would be especially interesting.

James Brazil · Answer

I have 2 SFH long term rentals I self manage in a state where I do not live. However, I used to live there until 5 years ago so I have family and friends who I can fall back on if absolutely needed but I mainly developed a relationship with a smalltime contractor or 2 who, as part of the deal when I hired them to do the house remodel, was to be "my guy". I was upfront with them and told them my situation of being out of town and worried about not being able to take care of my tenants. I call them when I need little things done and they take care of me. As I plan to buy more fixers in the area and turn into rentals I will keep giving the same contractors work in exchange for helping me out. Buying them a nice bottle of bourbon as a Christmas present never hurts either.

I also fly back regularly to see family. Funny how on the same trip I also coincidentally find time to do inspections on the properties and shake hands with the tenants and contractors to check in so I can write off the cost of the flights!

Self-managing out of state: real move or expensive lesson?

Self-managing out of state: real move or expensive lesson?

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