How do you manage rentals out of town?

Question

I always see Bigger Pockets members looking to invest out of town.

My question is...how would you manage rentals from out of town?

I know property management will be a common answer, but if you are not familiar with the area, I would imagine it would be difficult to find a trustworthy one.

Thanks for any input

Nathan Gesner · Answer

Finding a manager can be difficult...just like finding a tenant. If you take your time and do your research, you can find a good one and then things will be handled with very little input on your part.You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff. 6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!

Matt Anderson · Answer

Joe, it sounds a bit like you are partially answering your own question: "...if you are not familiar with the area..."Based on listening to many folks more experienced than myself (not very!) on the podcast and in various books, gaining familiarity with the area seems key to finding a PM you can trust. Part of your boots-on-the-ground team would be this PM, and maybe the other members of your core team can help steer you in the right direction for your search.Just today I started listening to the audiobook version of David Greene's book Long-Distance Real Estate Investing, and have been really enjoying it so far. Check it out, you may find some good tips for finding a PM you are comfortable with!

Aaron Winters · Answer

@Joe Marshall - I've recently started David Greene's Long-Distance Real Estate Investing and will look to pull together core-four team: Realtor, Property Manager, Contractor, and Lender. Find one and you can waterfall-find the rest of them!

Bjorn Ahlblad · Answer

I had rentals about 900 miles away. A realtor recommended a PM and with some training she has worked out great. Anything within an hours drive I manage myself. To be clear I don’t do any maintenance; just take calls and arrange for service, I do everything with tenancy only.

Joe M. · Answer

As always, thanks for the thoughtful post Nathan

Joe M. · Answer

Really appreciate it. Good stuff

Bjorn Ahlblad · Answer

Hi Joe, Let the PM know how you like things done and what your expectations are for your tenants and for yourself. What decisions you want them to make and what to defer to you. How quickly you expect them to respond to an email or message. The mere fact that you have informed them of your likes and dislikes will set you apart from many of their other customers.

Joe M. · Answer

What type of training?