Showing Rental to Prospective Tenants as Out of Town Investor?

Question

I'm in the process of vetting an out of state market for rental property purchases with the intent of building up my "passive" net cash flow.  Since I live (Raleigh, NC) about 4 hours drive from the market I've honed in on (Baltimore, MD) I'm curious if other landlords out there have a good system in place to allow some sort of lockbox to allow prospective tenants entry to view the property.

I was originally thinking of bypassing a property manager for tenant placement, and learn to manage the monthly operations on my own from afar, but I'm not coming up with any great ideas for how to ensure a safe, quick and successful prospective tenant viewing process from afar by myself.  Can anyone shed some light on if this is possible, or if I need to bite the bullet and pay a property manager their fee of 1 month rent for tenant placement services?  I'm happy to drive to the property and set it up with keys/lockbox but I'm not able to make multiple 4hr trips during the week to show it since I also work a full-time office job.  Thanks in advance for any and all advice.

Michael Bowman · Answer

Good afternoon Michael!

Well I must disclose I am somewhat impartial to the property management business as I own one, however I do not manage anywhere near Baltimore, so I feel this advice will be fair and unbiased. Though I always strive for that, we all have natural biases when we have skin in the game. I hope my experience managing 900 rentals will prove to be of value to you.

To answer your initially question about the safest way to set up self-assisted showings, I'm not sure there is one. The best resource I have seen is Rently. It is a lockbox that is placed on the front door and prospective tenants can enter their credit card info into Rently customer service, get a hold placed on their account, and view the home. There are a few problems here however:

1. I have never priced this, but I heard Rently is very costly to roll out, and may never make sense for a small portfolio.

2. I still can't wrap my head around the insane amount of liability on your head when a prospect whom has never been vetted in any way shape or form views your home unassisted. From damages to the home, to potential injury to the prospect, the risk-adverse side of me cringes at this idea.

But it's an option...

I think your best route will be to hire a good, high quality, high protein property management company. I will say this, there aren't many of us out there, and you cannot interview enough. Interview, research, interview, research, rinse, repeat. A bad property manager will cause more destruction than you can imagine, however a good one will ALWAYS make you more in the end.

My major factors that matter most in hiring a good PM:

1. Communication: How do they funnel rental leads, manage incoming calls, etc. What are their hours of operation? We are open 8-7 monday-friday and 8-5 on Saturday. You can call us anytime during those hours and you will reach us with ease. Most PM companies however you have to jump through 14 different hoops then you're stuck with a voicemail and never get a returned call. This is by far the biggest point to hire by in the PM world.

2. Reviews: If a PM company sucks, it wont be hard to find that out by a quick google search. We have a 4.5 rating on google with 59 reviews. We are also on virtually every other website available with positive reviews across the board. We aren't perfect, and so many prospective clients ask about the negative reviews online to which I give a good explanation for. But nothing tells a company more than their online presence. If they have no or little reviews, they are either a mom and pop or aren't experienced. If they have a bad google rating, you don't want them. You want the company with overall good reviews and plenty samples to choose from.

Notice what isn't in my top things to hire a PM? Price. Of course that is important, but quality, excellence, and a track record of success are top priority.

Let me know how else I can help!

Tim Youse · Answer

There are tenant placement services in Baltimore you can use that will still allow you to self manage once a tenant is in place. I would recommend you using one of those services rather than having tenants view the property by themselves while you handle the scheduling remotely.

Christian Wathne · Answer

Similar situation here. I live in the bay area of California, but invest in Seattle. I self manage my properties on an ongoing basis, but hire a leasing agent to take pics / show property / screen tenants and get new lease signed; then I take over as the PM. I pay 1 month rent for this service and find it very worth while.

Nick H. · Answer

it might be diffcuilt to do you may have to bite the bullet and pay for tenant placement. A little tip that has helped me is actually going to tenants that qualify to rent your property current residence. How they keep their current home is how they'll keep yours you'll be surprised at the amount of people that don't even clean up even when they know you are coming over. You may want to see if your perspective tenant placement service does home vist some do and with you managing from out of town it may save you a lot of headaches just my two cents good luck and props to not letting distance stop you from making it happen.

Sam Shueh · Answer

Hire a local realtor to put on MLS, showing to candidates and have other realtors to show with his lock box. They know how to screen candidates. They submit all candidates and ask you to sign a contract by eSign.  You save your endless travelling time and have a life. Many realtors do not want to manage people you handle the management. When something comes up pay them by the hour.

Showing Rental to Prospective Tenants as Out of Town Investor?

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