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For as long as I’ve been involved with real estate investing, I’ve held a certain set of core beliefs, which included the following:
- The reason to pursue real estate in lieu of another investment vehicle is because of the investment controls real estate affords.
- With that being said, real estate investing is all local. Don’t buy a duplex 120 miles away from your house because you won’t be able to keep an eye on it, and you will nullify the very thing that makes real estate attractive — fast response time.
This is what I’ve believed, how I’ve invested, and what I’ve taught. “Buy locally” has been the motto.
At the moment I am in Arizona — 2,300 miles away from my portfolio in Ohio. Yep, this qualifies as somewhat long-distance. And yesterday, I was asked in a telephone conversation how I manage to do this. Let’s talk about this.
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To preface this conversation, let me just say that I am not sure if self-managing long-distance for a decade is either workable or palatable. Time will tell how I play this in the end, whether I sell out or hold on. But for now, things are working, and in this article, I will hit the highlights on what I do.
The Team and More
The main difference between what I do and what most people do as it relates to long-distance ownership of property is that for me, before it was long distance, it was local. I built my systems, my management infrastructure, and my vendor relationships while I was there. Every facet of what happens on a daily basis in the life of an investment property has been practiced for a decade before long distance was attempted.
More importantly, I know my assets. I am not walking into new acquisitions long distance. The things I still own in Ohio are known commodity to me — the good, bad, and the ugly. This makes it infinitely easier to manage!
More importantly yet, I know the market intimately. I know where my assets are positioned within this market. This makes a huge difference!
Having said this, while I am a distance away, which ultimately means that I am long distance, I am not sure that this is the same kind of long distance that a guy or gal with too much loose cash from California is looking at when considering buying assets in the Midwest. But in case it might be helpful to know what I do and how, here we go.
One of the absolute key elements in being able to remove yourself from physical location is to centralize as many of the tasks in one electronic place as possible. My payment portal, rental applications, security deposits, and maintenance requests all come to me online via Buildium.com (to learn more about Buildium, click here). There are other services out there aside for Buildium; I just happened to use them. The cost is minimal, yet it allows me to keep my finger on the pulse happenings without being there physically.
Does Buildium Put Signs in the Yard?
Don’t be stupid! Buildium is a cloud software system. It doesn’t have arms and legs. It cannot go stick the “for rent” sign in the yard. For that — and many, many other things — I have my handyman. This is truly, more so than Buildium, where the rubber meets the road as it relates to me being able to run my portfolio long-distance.
The guy and I have been together for six years. He has never lied about anything, and I have no reason to think that he ever will. He is one of those uniquely capable people who are at once well-spoken and good communicators and can fix most anything that the tenants can break.
And anything he cannot fix, he is my point man to professionals.
The point I need to drive home to you is this: My relationship with my handyman took years to develop. We kissed a lot of frogs together. He’s seen me at my best and my worst. Is it possible that you can find someone you can trust on the first outing — sure, though you’d have to be the luckiest investor alive…
As I am writing this, there is a 31-square roof going onto one of my buildings, units are being scheduled to be sprayed for bugs, leaky faucet are being changed out, widow are being replaced, and some carpet is scheduled to be laid on Saturday. The roof, carpets, and extermination is being done by vendors I’ve used for 10 years.
This is so important — having vendor relationships is absolutely key. I have them, which makes long-distance management an option.
What About a Property Manager?
I am on the record stating that unless you are dealing in the 100+ space, you cannot afford a PM. You just can’t afford to give up 10% of your top-line and expect to make any money.
Short of this, the only option is to self-manage. If you are local, it’s no big deal. Long distance, however, is problematic. Still, with the advent of Buildium, Apfolio, and others, it is more possible than ever to systematize rental ownership workflow.
And from here, it’s all about having the right people on the ground, and this is where I do not have any advice to offer. I am lucky in that I built those relationships while on the ground. While I think it’s possible to do it in other ways, I just don’t have anything to suggest.
Do you believe in remotely managing properties? What tools do you use to do so?
Let me know your thoughts with a comment.