Author Topic: Can I manage the remote property myself instead of property manager?  (Read 1348 times)

bornInFlorida

  • 5 O'Clock Shadow
  • *
  • Posts: 35
  • Age: 49
  • Location: Seattle
All -

I own a town house that is about 400 miles away (6 hour drive). I currently have a property manager that I pay about $200 per month for managing it. The tenant has been paying rent to me on time. I am thinking of getting rid of the property manager mainly because I feel I can just work with the tenant directly (who I have spoken to and is very cooperative). In situations where the tenant decides to leave, I can get a realtor to rent the property for me (charges one time rent or something) instead of using a property manager who I have to pay monthly.

Please let me know what all things I should think about before making this decision. Feel free to give your opinion on the decision as well.

Thank you in advance for any help!

twe

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Can I manage the remote property myself instead of property manager?
« Reply #1 on: January 11, 2019, 07:50:13 PM »
I saw many friends do this (was in the military where it was common to keep a house in the hope you'd come back to the same place 3 years later). About 50% of the time it worked out well, and about 50% of the time there were serious issues that were far more expensive than the 10% of additional cash flow. The fact that no one ever checks on the property just seemed to give some people a licence to destroy. You may have better luck given that you already have a good tenant in place.

In personal experience with rental properties totaling 25+ years across them all, only had to evict someone 1 time for damage, but that was because the property manager caught it before it was too late.

For me, paying 10% of the rent to a property manager is well worth it (but if I lived close to all my properties, I'd manage them myself).

bornInFlorida

  • 5 O'Clock Shadow
  • *
  • Posts: 35
  • Age: 49
  • Location: Seattle
Re: Can I manage the remote property myself instead of property manager?
« Reply #2 on: January 13, 2019, 10:14:37 AM »
Thanks @twe

But wouldn’t tenant pre-screening (credit score history, employment, background check, prior landlord reference, spidy sense screening) screen out a tenant that would potentially damage the property.

dandarc

  • Magnum Stache
  • ******
  • Posts: 3278
  • Age: 36
Re: Can I manage the remote property myself instead of property manager?
« Reply #3 on: January 13, 2019, 10:29:38 AM »
Thanks @twe

But wouldn’t tenant pre-screening (credit score history, employment, background check, prior landlord reference, spidy sense screening) screen out a tenant that would potentially damage the property.

Usually yes, but not always. People change, and some problems won't make it onto a background check. Vast majority of tenants are pretty good - rent would have to be much higher almost everywhere if that was not the case. All a question of the risk and hassle you're willing to deal with.

We're currently renting without a property manager long distance, and even though our tenant is great, the risk and coordinating the occasional repair across 3 timezones does give me a little heartburn. Not enough to get out of the arrangement, but if I had it over, we'd have just sold the house.

waltworks

  • Magnum Stache
  • ******
  • Posts: 3040
Re: Can I manage the remote property myself instead of property manager?
« Reply #4 on: January 13, 2019, 11:27:41 AM »
Like a lot of things, it'll work just fine 90% of the time. The other 10%, it'll go horribly, horribly wrong. I've self-managed from 500+ miles away and the worst I personally ever had happen was tenants constantly asking for repairs on stuff that I suspect they were misusing/abusing. But I couldn't go check on it personally, so it was just a constant series of calls to a handyman and replacing stuff. Not that terrible but annoying.

The bigger potential issue, of course, is tenants doing damage/having big pets that like to chew/smoking so much weed the house smells like it forever/committing crimes/etc that you'd catch if you were physically in the area and checking in occasionally.

-W

YttriumNitrate

  • Bristles
  • ***
  • Posts: 477
  • Location: Northwest Indiana
Re: Can I manage the remote property myself instead of property manager?
« Reply #5 on: January 13, 2019, 11:57:54 AM »
In situations where the tenant decides to leave, I can get a realtor to rent the property for me (charges one time rent or something) instead of using a property manager who I have to pay monthly.
In my opinion, finding the right tenant is the single most important thing you can do to make sure you have good experiences as a landlord. I self manage a property that's about 95 miles away, and even if it were 400 I'd still do the tenant showings/screenings myself...although I'd make a weekend out of it rather than a day trip.

marty998

  • Walrus Stache
  • *******
  • Posts: 6032
  • Location: Sydney, Oz
Re: Can I manage the remote property myself instead of property manager?
« Reply #6 on: January 13, 2019, 01:11:44 PM »
Fee I pay to my property manager is 5.5%.

They have access to various tradesmen at bulk rates too so there's some additional value there. In the past three years I've had to replace a dishwasher, stove and laundry/bathroom exhaust fans. The effort involved in arranging that with the tenant while carrying on with life (remember we are trying to get passive income here) was worth the cost it.

In short, the less I have to deal with my investment the better. Last thing I need is a call on the weekend saying "the hot water system has died and could I fix it".

Drole

  • Stubble
  • **
  • Posts: 217
Re: Can I manage the remote property myself instead of property manager?
« Reply #7 on: January 13, 2019, 01:48:27 PM »
Keep the property manager.  Leasing is one thing.  Repairs, maintenance, and emergencies are all a pain in the butt from afar.

I pay a lot for my long distance manager but they also have dealt with all sorts of repairs that i could not manage from afar and have brought in tenants that pay more (and more than cover their fees).  They also do direct deposit, have a property protest service i can use, handle the calls and billing from the alarm company, nice organized statements for taxes, etc

Makes my life much easier. 

rothwem

  • Bristles
  • ***
  • Posts: 481
  • Location: WNC
Re: Can I manage the remote property myself instead of property manager?
« Reply #8 on: January 14, 2019, 10:15:14 AM »
My rental is about 300 miles away and I'm self-managing.  I've been at it about 8 months so far, but I used to live in one side of my rental, so I've got a bunch of people I know I can call if issues come up.  I don't think I'd do it if the rental was in an unfamiliar place. 

bornInFlorida

  • 5 O'Clock Shadow
  • *
  • Posts: 35
  • Age: 49
  • Location: Seattle
Re: Can I manage the remote property myself instead of property manager?
« Reply #9 on: January 18, 2019, 06:51:38 PM »
Thank you all for your feedback. Very much appreciated.

clifp

  • Pencil Stache
  • ****
  • Posts: 528
Re: Can I manage the remote property myself instead of property manager?
« Reply #10 on: January 19, 2019, 12:41:33 PM »
It is also worth noting that some cities/state require a property manager if the owner is remote.  Hawaii does, and so do some cities in So Cal, (at least they use to).  Definitely worth checking with your city.

YttriumNitrate

  • Bristles
  • ***
  • Posts: 477
  • Location: Northwest Indiana
Re: Can I manage the remote property myself instead of property manager?
« Reply #11 on: January 19, 2019, 01:47:29 PM »
It is also worth noting that some cities/state require a property manager if the owner is remote.  Hawaii does, and so do some cities in So Cal, (at least they use to).  Definitely worth checking with your city.
Do they require a "property manager" or just a local contact the city can call if there is a problem? Where I have my rental the town requires that there be someone within county limits that the town can call if there is ever a problem. My local contact is a friend who still lives in the area. Aside from having his name listed as the backup contact on city records, he has had precisely zero involvement.

clifp

  • Pencil Stache
  • ****
  • Posts: 528
Re: Can I manage the remote property myself instead of property manager?
« Reply #12 on: January 19, 2019, 02:47:14 PM »
It is also worth noting that some cities/state require a property manager if the owner is remote.  Hawaii does, and so do some cities in So Cal, (at least they use to).  Definitely worth checking with your city.
Do they require a "property manager" or just a local contact the city can call if there is a problem? Where I have my rental the town requires that there be someone within county limits that the town can call if there is ever a problem. My local contact is a friend who still lives in the area. Aside from having his name listed as the backup contact on city records, he has had precisely zero involvement.

Hawaii requires that you have written a rental agreement with the property manager. So just having your friend on record wouldn't be legal here.

Quote
(f) Any owner or landlord who resides without the State or on another island from where the rental unit is located shall designate on the written rental agreement an agent residing on the same island where the unit is located to act in the owner’s or landlord’s behalf.”

YttriumNitrate

  • Bristles
  • ***
  • Posts: 477
  • Location: Northwest Indiana
Re: Can I manage the remote property myself instead of property manager?
« Reply #13 on: January 19, 2019, 05:51:21 PM »
Hawaii requires that you have written a rental agreement with the property manager. So just having your friend on record wouldn't be legal here.
Quote
(f) Any owner or landlord who resides without the State or on another island from where the rental unit is located shall designate on the written rental agreement an agent residing on the same island where the unit is located to act in the owner’s or landlord’s behalf.”
Interesting. It seems that the term "agent" is undefined (meaning there isn't a requirement that they have a professional real estate license), so this portion of the statute could probably be satisfied by just adding a section to the lease that says "the local agent is YttriumNitrate's friend Joe Blow who lives at 186 Fleet Street."
https://law.justia.com/codes/hawaii/2017/title-28/chapter-521/section-521-8/
« Last Edit: January 19, 2019, 05:57:15 PM by YttriumNitrate »

K-ice

  • Pencil Stache
  • ****
  • Posts: 853
  • Location: Canada
Re: Can I manage the remote property myself instead of property manager?
« Reply #14 on: January 22, 2019, 12:51:43 AM »
We manage from a distance. So we need to have a good plumber and electrician on speed dial. It killed me to pay $200 to fix a toilet flap but it was cheaper that the trip or a property manger.

The unit usually requires a trip from us for the in & out but we are a bit below market value so the student tenants usually find a friend.

I even know of someone who manages Hawaii vacation rental from a distance. I've never heard of that rule mentioned above. But maybe their cleaning service can act as the local rep.

clarkfan1979

  • Handlebar Stache
  • *****
  • Posts: 1794
  • Age: 39
  • Location: Kauai & Denver
Re: Can I manage the remote property myself instead of property manager?
« Reply #15 on: January 23, 2019, 11:44:08 AM »
I have been managing one rental at a distance for 8 years and another rental for 4 years. I have never used property management. You definitely need a handyman and list of service people. When something breaks, I call someone to get it fixed. Broken appliances are very easy to deal with because Home Depot/Lowes will install and haul away your old one.

I prefer to pick the tenants myself, so I do have to fly to the location to show the property. However, both of my properties are located near family, so I plan that around vacations to visit my family that would happen, even if I didn't have a rental. As a result, there is no real additional cost, except my time.

I typically spend about 4 hours/day, across 3 days to show the property. I multi-task and make small repairs in between showings. As a result, to show a property and rent it out, it's is about 15 hours of my time total. Most management companies charge one month rent, which would be $2325 or $1850.

I'm at the point in my life in which 15 hours of my time is worth saving $1850. If everything goes well, in 5-10 years it will no longer be worth my time and it will be 100% management.





 


bornInFlorida

  • 5 O'Clock Shadow
  • *
  • Posts: 35
  • Age: 49
  • Location: Seattle
Re: Can I manage the remote property myself instead of property manager?
« Reply #16 on: January 27, 2019, 03:14:27 PM »
Thank you all.

@clarkfan1979 - thanks for sharing your feedback. I am thinking of heading this direction of remote property management.

getting there pnw

  • 5 O'Clock Shadow
  • *
  • Posts: 10
Re: Can I manage the remote property myself instead of property manager?
« Reply #17 on: January 30, 2019, 06:25:48 PM »
If everything goes well, in 5-10 years it will no longer be worth my time and it will be 100% management.
This seems to be the key. Do the frugal before you're FI. Then decide whether to continue the frugal or not.

EthanS

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Re: Can I manage the remote property myself instead of property manager?
« Reply #18 on: January 31, 2019, 02:20:55 AM »
Well, I consider real estate investing as a passive income. But all these hassles don't seem like a really passive activity. As for me, no-trouble life worth $200 per month.