SFH - Remote Investing

[Dominick DiFilippo]

Hi! I'm considering buying single family homes out-of-state (Ohio, Carolinas, Tennessee, etc) and curious if anyone has experience with long distance rentals. Obvious to hire a property management company, but are there any negatives associated with remote investments? My partner is on the fence and any stories from other investors could sway his decision.

[Lane Kawaoka]

@Dominick DiFilippo 

So, back in the day, around 2012 to 2015, I started buying rental properties remotely in Alabama, Indianapolis, and Atlanta. I got priced out of the high-priced Seattle area, just like you're feeling in New York, man. Rent evaluations there just didn't make any sense, and I can only imagine how crazy it must be now.

Now, depending on your personal situation, if you're a higher net worth investor like an accredited investor, I'd say skip the single-family home stuff. Been there, done that. It's cool for folks with a net worth under half a million bucks or making under $150,000 a year, especially younger folks. But if you've got a family and a higher hourly rate, then yeah, just skip over that and go straight to the good stuff.

You really need a professional property manager, dude. I get it, it may feel like it's hitting your wallet with that 10% cut from rents and maybe even the first month's rent when you're finding tenants, but listen up, man. It's not just about the money. Having a property manager gives you some serious liability protection. They handle the day-to-day decision-making and have their own insurance, which acts as a legal barrier between you and potential headaches.

Of course, it all depends on your situation. If you're earning less than a hundred grand a year or your net worth is below a quarter mil, then doing it yourself might make sense. But for those of us who make a bit more, we're all about maximizing our income from our day jobs, rather than worrying about scraping together that 10% from a grand a month.