Long distance investment?

Question

I am trying to decide what my smartest investment strategy should be. I am in Southern Ohio and am looking at single family homes. my largest concern is that this a market that has been losing population for years and I do not see a whole lot of upside potential in property values or rent. My other option is to look at small multifamily units in Columbus or Cincinnati that I would then have to rely on property management companies to handle day to day. I would be self managing any local single family I may buy at least for the meantime. Any advice? The thoughts of long distance ownership for my 1st investment is quite intimidating.

Paul Sian · Answer

@Garett Koehler you are not far away from both Cincinnati and Columbus so while you are remote and may need a property management company you are also close enough to make regular visits to any building you purchase to see how things are going. In your case if deciding to go remote to one of those cities it would be wise to tour the buildings you want to consider for purchase yourself and to interview property managers in person to get a feel for how they do business. Ask them which buildings they already manage and go visit those buildings. It may not hurt to chat with tenants in those buildings and ask them how things are going as someone who is considering their services in the future.

Thomas Barrick · Answer

Garett Koehler I own a multi-family property in Cincinnati. Many neighborhoods around here are very block by block so do your homework before jumping in. You can still cash flow while paying a property manager in Cincy if you are not comfortable self managing yet. Feel free to reach out if you have any questions. Best of luck!

Bryan C. · Answer

Garett, there r a lot of us who have invested from a distance. Let us know what info u need. It can be done and helps having a team u can trust.

Eric Sztanyo · Answer

@Garett Koehler - good advice from @Paul Sian, @Todd Dexheimer and @Andrew Johnson - I live in Northern Kentucky, but invest in Cincinnati. The diverse economy creates a lot of areas of stable cash flow. I've invested in single family, multi-family and a vacation rental. All have been successful. Happy to help in other ways in terms of certain neighborhoods.

Ryan Evans · Answer

I second what @Todd Dexheimer said. I've got the same mindset in that if you invest non-locally you force yourself to run your business like a business. Not that there is anything wrong with it, but all the little check ins and spending your time handling little issues that pop up ultimately are low wage activities. If you want to scale you need to focus on the bigger picture stuff. That said, I would certainly like to be able to drive down the street and check in on my properties, but if the numbers work better in a different market then that's where you should go. The learning curve is scary at first, but will ultimately make you better.I recently met a guy who owns several hundred properties in his own market, but he's never been to almost any of them because it would detract from where his time is better spent. It's a matter of working ON the business, not IN it.In your case, I don't think you have to take one approach or the other. You're close enough to check in for the major stuff, but far enough away to not waste your time checking in every other day. Find a reliable handyman and you can manage it yourself.

Todd Dexheimer · Answer

I Invest out of state - so much longer distance. Advantages are that you force yourself to being hands-off on the management and can focus on building your business. You can focus on Markets that are growing with opportunity. Con would be you are not there every day and cannot check in if you need to on a whim. Overall for me it is a positive experience on the mid-sized Multi-family and more of a negative experience on the small multi-family.

Garett Koehler · Answer

@Paul Sian I agree with what you say and I would no doubt make the drive to see the options. After saying that, I see you are an agent in Cincinnati, anything you have on your radar currently for smaller multi family units? PM if you do. I am not yet sure that is the route I will go but am very interested in at least seeing what options are out there.

Andrew Johnson · Answer

Garett Koehler Any absentee owner (even if local) will have those nerves and trust issues. There are enough horror stories here and other places about bad property management. Of course, plenty of self-managers have picked horrible tenants, overpaid for a repair, etc. Bottom line, there risk in either scenario but probably a little more if you outsource to a PM. One of the differences (advantages) for you is that it's easier for you to get Cincinnati that someone from out here in California. Consequently, you can check up on your properties more frequently that I do so that can help (a little) to de-risk absentee ownership. The biggest issue (I think) with buying remote properties is you just don't know the area as well as local investors. Do you know Cincinnati or Columbus well? Do you have friends that know the area? Those can be a tremendous help for if you're looking outside of your area.

Linda Labbe · Answer

I Live in Canada so all my investing is out of state.. and at a distance if you have a great team on the ground all goes well am lucky do and love investing in the Toledo where am getting excellent returns

Nick Ferguson · Answer

@Garett Koehler . I actually do have an investment in your area in Portsmouth. I used to work near Otway and bought the house when I worked down there but I'm now in Cleveland managing from afar and I'm trying to build a property up here. Please reach out to me and I'd be happy to connect, give you any advice I have on the area, and just get to know you. You're the first person in the area I've seen in my 2 years or so on BP. Perhaps we could both help each other grow. - Nick