@Gabriel Isedeh, welcome to the community. I own a number of rental properties that are a few hours away from me (by car). I hope my thoughts will be helpful for you:
Before Getting A Property Manager: Learn to Manage Your Properties
I agree strongly with @Joe P. - if at all possible, start with a nearby place that you can manage yourself. When you're managing a property correctly (ensuring it's in very good shape before a new renter comes in, picking excellent renters, attending to problems quickly) you will learn both how smoothly things can go, as well as how difficult it can be when an unexpected problem emerges. Do this for a year. Maybe two. Get a feel for how long things take, how much things cost, how difficult it is to find good vendors.
(To clarify: I don't mean you have to do all the work yourself. You don't need to be the plumber and landscaper and painter and electrician etc. But you need to manage all those people, pay them, supervise their work)
At this stage, the most uncomfortable thing about managing the property will be your ignorance. It will be a steep learning curve. You'll probably feel some anxiety about the next thing you'll have to figure out. Good. You're learning.
At some point, you'll stop feeling anxious about having to solve new problems. It's not that you will have encountered all possible problems (hello, COVID-19!), but you will develop your general approach and landlord common sense.
At this stage, the most uncomfortable thing about managing the property will be the time it takes. It's not exactly difficult - you know you can handle whatever the property throws at you, it just takes time to do it well.
When you're at that point (and not earlier), you can think about getting a management company. You're essentially trading your time for money (which is generally what money is for, in my opinion). But you only do this when you are able to meaningfully supervise their work, by being able to say things like "THIS problem needs to be addressed within 12 hours, and THAT problem can wait until next month" or "Please explain the cost breakdown for this maintenance service, it seems a little high" or "I'd like to also see a quote for the same washer/dryer combo with a 5 year warranty".
While Getting A Property Manager: Finding a Good Management Company
Frankly, it's a neverending quest. They can start out good and go bad. You just never know. Be ready to jump to a new management company.
I am now using two management companies (each managing different properties), essentially to have redundancy in case (when) one of them stops functioning at an acceptable level. I picked each one carefully, as though it's the only one I'm using. I accept the slightly higher management fees as the price for having the peace of mind.
Here are some tips about finding a good management company:
- If you know anyone who owns rental property in the area, ask them.
- Go on Yelp.com and search for "property management". Look only at reviews by property owners (not from renters). Note the good and the bad.
- Send a message to users who left a bad review. Thank them for the heads up, explain you're looking for a management company, and ask them if they've found a good one since.
- Still on Yelp.com, search for real estate agents that don't manage properties. Look for ones that consistently get glowing reviews. Contact these agents and ask them to recommend a management company. Real estate agents live and die by their reputation.
- Learn how to interview management companies. A lot has been written on this already, so I won't repeat it.
After Getting A Property Manager: Stay Connected to Properties and Tenants
Once you hired a management company, the fantasy is that you can kick back and watch the money rolling in. And, you know, it doesn't have to be very far from that. But you still need to put in some work. Remember, if your management company is charging you 8% of your gross income, every $1,000 of rent you earn translate into $80 of income for them. They're just not motivated the same way you are. You miss a 2 months' rent because the unit is sitting empty? Big deal, they lost $160. They'll still get a full month's rent in commission when they place a tenant.
One of the worst things that can happen is for your property to sit empty. You have to stay on top of the property manager's timeline for renewing leases, advertising upcoming vacancies, preparing units for new renters, and signing leases. Different companies have very different practices. Listen carefully to how they explain why they do what they do, consider it, then decide how you think it should be done and insist that they do it. They work for you. But you have to supervise.
A far worse thing that can happen is for your properties to deteriorate without your knowledge. By "deteriorate" I mean suffer horrible damage like holes in the roof, water damage throughout the walls, infestations throughout, sewage flowing freely. By "without your knowledge" I mean that you have absolutely no clue. Nobody tells you. If you're lucky, all you know is that tenants stop renewing, and you can't find new ones. If you're less lucky, you get sued.
It's not easy to stay on top of your properties. Good management companies, like good pet sitters, will send you photos every once in a while. But even that is very partial information. And unless you're going to pay someone else to inspect your property occasionally, it's hard to know how it's doing.
The solution? Keep in touch with the tenants. THEY will tell you whenever there's a problem. Maintain boundaries: When they tell you about an issue, ask if they already contacted the property manager. If they didn't, that's what they should do. But if they did, three times, over the past two weeks, and nobody got back to them - well, you should know about that. And apologize. And set it right. It's their home, and it's your investment.
There are a couple of ways to keep in touch with tenants. Whenever a new lease is signed for any of your properties, make sure your management company sends you a copy. That's just good sense, and can come in handy for other reasons. Also ask them for contact information for all tenants (phone and email).
Then introduce yourself to the tenants (email is fine). Explain you want to make sure they're happy in their home. Explain that the property manager is the first point of contact, but that you're there in case they aren't happy. And for the love of all that is nice about this world, mean it when you write it, and keep meaning it afterwards. Then, check in with your tenants every 1-3 months. Just a quick "how's it going, anything I should know about".
So, there you have it, in three easy steps:
1) Manage yourself
2) Hire a manager
3) Supervise the manager
I hope this helps.
