How far would you consider driving to manage you rentals?

Question

Being in the Seattle area, the deals are all but gone since the market recovery. While I would love to move my portfolio and I to Florida someday due to the excellent price to rent ratios there, until that time I may end up buying in Spokane, WA, which is about a 4 hour drive from me.

The price to rent ratios there are more favorable, and you can meet the 1% rule fairly easily. Only hang up is the drive time. Just to make one visit is a days worth of driving round trip. Trip is expensable, but the TIME...

It is still at least close enough for a weekend trip once a year to check things out, but if I had to turn a place, etc. it would get really ugly real fast, and property management is not really reasonable in price, taking 10% off the top of gross income, which ends up being more like half of my net profit for merely being available in case something happens. If said property management can do handy man stuff etc. then we may have something. I'd be willing to pay a stipend that they get even if they don't get called, but when they do get called, their service is already paid for, they fix the leak, etc. and all is well. If I get someone presentable enough I can even have them show the houses during vacancies.

Anyways, while that sounds ideal, I think I just answered my own question; four hours drive one way is too far. Maybe I will stick to Tacoma and possibly expand into Bremerton.

Dawn Brenengen · Answer

@Jack B. It depends on how involved you want to be with the property. If you are doing the lawn mowing yourself every two weeks, then you'll want it to be close. If you are fine with scheduling everything by phone/email and paying contractors to do everything, then you can be further away. If you don't want to pay for monthly property management, maybe you can find a local company that will just do the lease ups, and let you manage yourself. I find that to be the most time-intensive part of my job...handling turnover.

Peter Mckernan · Answer

@Jack B.

I would say @Steve Vaughan is pretty spot on with his information about distance.

I would add that it must make financial sense (i.e. gas expense, time, price point, and ROI). I have two rentals that are about 50 minutes away from me; however, they are in the same town I grew up in and my parents still live there. I head back to see them and gives me time to check in on my rentals.

Also, make sure it's an area that can give you a good ROI and meets your price point. Some of the areas around me are very expensive.

Peter

Steve Vaughan · Answer

Hi @Brian Fouts. To self-manage I agree with @Jassem A.. I have 17 that are 30 mins away and that's plenty. If you have a good PM, conceivably you could be about anywhere in the country I'd imagine.

I have a friend that self-manages a Wenatchee rental from Seattle. He finds himself doing outdoor stuff here and in Leavenworth anyway and schedules his viewings around those. He also calls me from time to time, of course. He has a profitable IT business and does it for the tax benefits.

Just an option (Wenatchee). Be happy to share about my area if you have specific questions. Cheers!

Joe Villeneuve · Answer

As far as my Property Manager will travel...since they do the property management...not me.

Jassem A. · Answer

less than 1.5 hours but preferably less than 45 min

Alex Chin · Answer

@Jack B. - If you're considering investing in Spokane, I would suggest hooking up with @Enrique Jevons. His property management company outright owns about 100 doors and manages over 600 in Eastern Washington. He probably has the infrastructure to be able to support your investing there if that has become your target area.

10% is pretty standard for a property management fee, and they should handle a lot of the time consuming tenant interactions. What do you value your personal time at? Is that worth the property management fee?

Steve Vaughan · Answer

Whoops! Meant to tag @Jack B.. Sorry, Brian!

Brian Fouts · Answer

Of our 40 or so rental properties, I think one of my partners has seen 2 in person. For us, having a rental portfolio means NOT having to go see them and be a landlord. 10% doesn't really have big enough of an impact on our revenue, but we do own most of them outright and have small mortgages on the rest.

Spokane is a better place to rent that the greater Seattle area.

Could consider Oly, Centralia, Mt Vernon, Chehalis, etc. Closer, better price points, good rental markets...

For me, if I wanted to play landlord, it would be 2 hours max. If I was going to buy multiples, I would buy in Spokane. I have friends there that I would pay a few bucks to go visit a property one or twice a year.

How far would you consider driving to manage you rentals?

How far would you consider driving to manage you rentals?

Most Popular Reply

8 Replies