Help! Rental Property Location! What's Too Far?
Hello,
New to the REI arena and am considering sfh rental properties. In searching for a positive cash flow I have found several areas/states where the cost of sfh would create this using Section 8 renters. However, I live in Queens, NY and the properties i've located are in Albany, NY, and some in PA. Is that too far to own rental propeties? Will I be traveling the 2-3hr drive and regreting it? Will hiring a management company help? Any info would be helpful.
ast159
The answer is it depends.
I can't tell you if you would mind driving 2-3 hours everytime you need to visit a property. I personally wouldn't have properties that far away that I was managing. If that is where the deals are you might budget into your deals 6-10% to pay for a mgmt company.
I would prefer to have rentals in an area different from my home. When renters leave the property , you never know if it will be on good terms or not. Plus if that is where the deals are, would give it strong consideration before deciding it is too far.
I think it depends on the deal. We have an 8 unit apartment in NY and live 2-3 hours away in PA, but we have an onsite maintenance man and a local realtor for filling vacancies so it's not a big deal. However with a SFR there may not be enough of a margin to justify the management expense. Also - depending on the property's condition - is it renovated or rehabbed or is it likely to require frequent repairs?
These are all things to consider when deciding if an out-of-area deal makes sense.
Best of success to you!
Thanks for your input everyone. It's much appreciated.
I think you have to look at your numbers and decide if you can or want to hire a PM.: it really cuts into your cash flow.
I do it all:
manage some close by
hire a PM for a few 2 hrs. away
manage myself 5 props 2-3 hrs away.
The answer is in finding the right tenants and keeping a good rapport w/them.