Out of state investing

Mesa, Arizona
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Out of state investing

Braeden Hoff
Member since 2026 · 8 posts · 3 votes

I'm currently in Arizona and plan to get my first property here but I don't plan on staying here so I'm open to investing out of state but the only thing is that hiring a property manager. Does having a property manager kill your cash flow and is having a property manager worth it with a small number of doors.

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Jeff Roth
Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 475 posts · 262 votes
17h

Hi Braedon from Arizona-

You asked about investing out-of-state and if a property manager is worth the expense even for smaller properties.

Great question! I always recommend investors use a property manager even if they live in-state and underwrite their investments factoring the cost of the property manager.

A good property manager is one of the most important members of your investing team. They should not only be keeping your property occupied and working with tenants to reduce turnover but improving the property and rents to maximize your return on investment. A property manager also helps keep your real estate investing as passive as possible so you can do other things and scale your portfolio without getting burned out from doing the property management work yourself. They also keep you compliant with local and national rental and housing regulations.

This is especially important as an out-of-state investor.

To Your Success!

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  • Alex Rodgers
    Investor · Los Angeles, CA · Member since 2023 · 14 posts · 19 votes
    1d

    I would always recommend buying an investment property with enough padding that you can afford to hire a property manager. Plans change, and you may want the option to not have to manage a property yourself. A good property manager can be worth their weight in gold. It doesn't matter how many doors you have.

    That being said, if you are buying a property out of state, I would consider hiring a property manager a requirement. Does it kill cash flow? Yes. They take 7 - 10% off the top of whatever you bring in every month. You are still on the hook for repairs, capex, etc. Property managers also charge additional fees. Fees for placing tenants, renewing leases, technology fees, etc. They can sometimes cost more than I would like. However, you should simply budget for all of this, and find a deal that still cash flows, despite all of these fees.

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 671 posts · 283 votes
    23h

    @Braeden Hoff Having experienced both self-managing and using a property manager, I wouldn’t look at it as just a question of how many doors you have. I’d weigh the cost against how involved you want to be—especially if you won’t be living nearby. With self-managing, I’d factor my own time into the decision, not just the money I’d save on management.

    Since you already know you may leave Arizona, I’d run the numbers with property management included from day one, even if you manage it yourself at first. I’d ask for the full fee schedule, including leasing, renewals, and any maintenance markups, and see what’s left after expenses and reserves. For me, a manager would be worth considering even for one property, but I wouldn’t want to buy a deal that only works if I manage it for free. I’d also be selective about who I hire—the fee alone wouldn’t decide it.

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  • Jeff Roth
    Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 475 posts · 262 votes
    17h

    Hi Braedon from Arizona-

    You asked about investing out-of-state and if a property manager is worth the expense even for smaller properties.

    Great question! I always recommend investors use a property manager even if they live in-state and underwrite their investments factoring the cost of the property manager.

    A good property manager is one of the most important members of your investing team. They should not only be keeping your property occupied and working with tenants to reduce turnover but improving the property and rents to maximize your return on investment. A property manager also helps keep your real estate investing as passive as possible so you can do other things and scale your portfolio without getting burned out from doing the property management work yourself. They also keep you compliant with local and national rental and housing regulations.

    This is especially important as an out-of-state investor.

    To Your Success!

    1Reply
    • Braeden Hoff
      OP
      Member since 2026 · 8 posts · 3 votes
      4h

      How would I budget for having a property manager

      0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    16h

    Hi Braeden, welcome. Short answer: yes, a property manager takes a bite out of cash flow, but with an out-of-state rental it's usually worth it, and the real fix is to price the fee in before you buy. Management typically runs somewhere around 8-10% of rent, plus leasing and renewal fees, so underwrite with management, vacancy, repairs and capex all included and only buy if it still cash flows. With a small number of doors the percentage is the same, so the real question is whether you want to be the one answering tenant calls from another state.

    If cash flow after management is the goal, Columbus is worth a look. A lot of the deals we see there hit the 1% rule and still cash flow after every expense, most come with $20K-$30K of built-in equity, and single families mostly run $120K-$180K. Landlord-friendly rules help too. Happy to connect and compare notes, and I can introduce you to a couple of investor-friendly property managers here if that ever becomes useful.

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  • Ryan BakerBusiness Member
    Lender · Strongsville / Cleveland, OH · Member since 2026 · 124 posts · 32 votes
    15h

    With only a few doors, a good property manager is usually worth it when you're investing out of state, mostly because they handle tenant placement, repairs and rent collection while you're not there. Just interview a few and ask how they handle maintenance approvals and vacancies. I also do lending, so when you're ready to look at financing your first property I'm glad to go over loan options and what lenders look at for out-of-state buyers. Give me a call and we can talk it through.

    [email protected]330-548-3340
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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes
    13h

    Happy to chat on Kansas City. Hiring a PM shouldn't kill your cashflow. You'd factor that in when you are analyzing the deal. A good PM is worth it's weight in gold.

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 677 votes
    13h

    The question is not how far away it is, it is whether the numbers work with a property manager in them from day one. I buy in Memphis because the numbers work there: single-family BRRRR houses under $100K, ARV $180K-$265K, Section 8 rents $1,395-$1,950 for 3BR+. If Mesa works at those kinds of numbers, buy in Mesa. If it does not, buy where it does.

    On the manager question, run the numbers with the manager in them before you buy. If a deal only works when you self-manage from another state, it does not work. A good manager is worth it when the rent covers the fee and the deal still passes the 1% rule. A bad manager costs more than no manager, so interview like you would hire an employee, not like you are shopping for the lowest fee.

    What do the Mesa numbers look like on a 3BR - purchase price and rent?

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  • Jayson Bates
    Lender · McKinney, TX · Member since 2026 · 14 posts · 3 votes
    12h

    Braeden, on a first Arizona purchase the PM question is real. For one door, full-service management often runs about 8-10% of rent plus leasing fees, which can wipe a thin cash-flow deal. A lot of people self-manage the first property while they're still local, then bring a PM on when they go out of state or add doors. If you do hire one, underwrite the deal with that fee already in the numbers, and ask how they handle turnovers and maintenance caps. Also worth deciding early whether this first buy is a primary you later convert, or a straight rental, because the loan type and down payment change a lot between those two. Disclosure: I'm a lender in Arizona and Texas.

    1Reply
  • John Leland
    Specialist · I give advice - [email protected] - I focus on states where investing is profitable, reasonably safe & secure · Member since 2026 · 177 posts · 63 votes
    11h
    Quote from @Braeden Hoff:

    I'm currently in Arizona and plan to get my first property here but I don't plan on staying here so I'm open to investing out of state but the only thing is that hiring a property manager. Does having a property manager kill your cash flow and is having a property manager worth it with a small number of doors.

    I would think you would want to manage the first one so you know what is involved and what to expect from a manager. We self manage because we set it up that way and it works out fine. I think it's more related to how involved you want to be, but try it on your own for a while to get a true feeling so if you go with a manager you will know if they are any good right away. Property managers can really mess up a situation if they aren't doing a good job.

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  • Matthew Tregoning
    Property Manager · Melbourne, FL · Member since 2019 · 525 posts · 181 votes
    11h

    Braeden, I’d test the service side with a specific scenario: you’re out of state, the resident reports a problem after hours, and the usual vendor is unavailable. Ask each manager to walk through who answers, who goes out and when you hear about it. I manage vacation rentals across several states, and local coverage matters even with one door. The scope behind the fee is what tells you how much work you’re actually handing off.

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  • BJ Everson
    Realtor · Columbus, Franklin County · Member since 2026 · 94 posts · 26 votes
    11h

    Braeden, short version: a PM doesn't kill a good deal — it reveals a thin one. Before you debate self-manage vs PM, run the same AZ (or OOS) deal twice: once with full management + leasing + a real vacancy/repair line, once without. If only the no-PM version works, you don't have a cash-flow deal, you have a job. For a first door while you still live nearby, many people self-manage until they leave the market, then hire — but only if the numbers still clear with the fee. What rent-to-price ratio are you screening for in Mesa vs the OOS markets you're eyeing?

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  • Ryan BrownPro Member
    Real Estate Agent · Louisville, KY · Member since 2022 · 100 posts · 32 votes
    10h

    Braeden, I'd find out exactly what the manager's fees are before you start making offers, then use them to set what you can pay for the property. Don't just figure it'll come out of cash flow later. Get the full fee schedule: the monthly percentage, leasing fees, renewal fees and any markup on maintenance. Then work backward to the price where the deal still works with all of that included.

    I put together a list this morning that shows why this matters. I ran every move-in-ready single-family house for sale in Louisville, 962 of them, at 20% down on an 8% investor loan, with reserves set aside for vacancy, maintenance and capex. Only 25 cash flowed at list price if you manage them yourself. Add an 8% management fee, and that dropped to five.

    That doesn't mean using a manager kills every deal. It means the manager's fee has to be part of your offer price from the start. For each house, I also figured out the price where it breaks even and the price that would produce a set monthly cash flow with management included. That number becomes your ceiling when you write the offer. Since you already know you'll be investing from out of state, I'd run every deal that way from the start, even your first one in Arizona.

    [email protected]502-889-0122
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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    8h

    How many mistakes can a DIY owner make that will cost them MORE than hiring a PMC and may even bankrupt them?

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  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    8h

    Hey @Braeden Hoff, I work with a lot of out-of-state investors and personally own 30+ rental units. I definitely think having a good property manager is worth it, especially when you're investing from another state.

    Most PMs charge around 8–10% of monthly rent, so you want to factor that into your numbers before purchasing. A good PM handles leasing, maintenance, rent collection, and tenant issues, which saves you a ton of time.

    I would rather have slightly less cash flow with a good PM than try to manage everything remotely. Just make sure the deal still cash flows after all expenses.

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    8h
    Quote from @Braeden Hoff:

    I'm currently in Arizona and plan to get my first property here but I don't plan on staying here so I'm open to investing out of state but the only thing is that hiring a property manager. Does having a property manager kill your cash flow and is having a property manager worth it with a small number of doors.

    It will cost you about 10%. I have some OOS investors that self manage

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  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 893 votes
    6h

    Hey @Braeden Hoff ! I wouldn’t look at property management as something that automatically kills your cash flow. It’s really an expense you need to account for when analyzing the deal. If a property only cash flows when you manage everything yourself, it might not be the right investment, especially if you eventually plan to move out of state.

    Even with just one or two properties, I think having a good property manager is worth considering. They can handle tenant communication, rent collection, maintenance coordination, and day-to-day issues while allowing you to focus on growing your portfolio. The key is finding a good manager and making sure the numbers still work after their fees.

    I’m a real estate agent based in Memphis, TN, and I work with out-of-state investors building rental portfolios. One thing I always encourage investors to do is underwrite their properties with professional management from day one, even if they plan to self-manage initially. That way, you know the investment can still work when you eventually relocate. Happy to connect if you ever want to explore the Memphis market!

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 898 votes
    5h

    A property manager will obviously reduce your cash flow, but I wouldn’t look at the fee as automatically being a bad thing. If you know you’re eventually going to move, I’d underwrite the property with management included from the beginning. With only a few doors, the fee can have a bigger impact, but so can the time and hassle of managing from another state. If the deal still makes sense after paying a good property manager, then you’ve built the cost of being a remote investor into the numbers from day one.

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  • Patrick O'SullivanBusiness Member
    Property Manager · Phoenix, AZ · Member since 2024 · 557 posts · 210 votes
    5h

    From the management side, the monthly fee usually isn’t what makes or breaks cash flow on a small portfolio. The bigger swings come from how long a unit sits empty, how often tenants turn over, and what repairs end up costing. A manager who fills a vacancy two weeks faster or keeps a good tenant for an extra year can easily cover their fee, and one who doesn’t can cost you a lot more than the percentage on the contract.

    So when you interview managers, I’d ask for their average days to lease, their renewal rate, and how they price and approve maintenance, not just what they charge. With only a few doors, also ask about minimum monthly fees, since those can push the real cost well above the advertised rate on a lower-rent property.

    Since you’re still in Arizona, you could hire a manager on that first property while you’re local. You’d see how they handle leasing and repairs up close, and by the time you move, you’ll know whether the fee is paying for itself.

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  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    1h

    Sigh.

    People just starting out should never invest out of state. You don’t know what you’re doing. You will get taken. The failure rate for real estate investors starting out is on the order of 95 percent.

    Besides, you might not even like being a landlord. Stay hyper local on your first investments. Starting out long distance gives you all the long distance headaches and expenses and adds the cost of an airplane ticket.

    Here’s some more advice for you: Don’t take advice from people who get paid on commission.

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