Landlording from afar

[Rachan M.]

Hope you're having a great day! My hard work over the years has paid off and I have been lucky to have some disposable income to invest. Thinking about buying a rental property in one of the growing cities and renting / managing it through a property management company. Is this a good idea? What should I consider before jumping in? You have a lower risk idea to grow the money? Do tell..

Thanks in advance!

[James Wise]

Originally posted by @Rachan M.:

Hope you're having a great day! My hard work over the years has paid off and I have been lucky to have some disposable income to invest. Thinking about buying a rental property in one of the growing cities and renting / managing it through a property management company. Is this a good idea? What should I consider before jumping in? You have a lower risk idea to grow the money? Do tell..

Thanks in advance!

I like to give out this punchlist to all of my out of state clients. If you follow this it should really help you mitigate a lot of issues when you are investing from afar.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
• Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.