Is This NUTS?
All
Does anyone have any rental properties located out of state without using a property management company and/or friends & family to take care of the property?
I ask this b/c I know a guy at my work that apparently owns several properties in Texas, while living in California. He says that he ONLY uses property management to fill his vacancies. This is how he works: When he goes vacant on a place, he contacts the PM company and pays them one months rent to get in a new renter. Then, he essentially tells the PM company that they are no longer needed, and contacts his new tenants directly. He tells them that he is the owner but lives in California. If there is a maintenance problem under 50.00, the tenant must take care of it, and then it is deducted from their rent. For problems over 50.00, he says he wants the tenant to call him directly and he will get someone out to fix it.
Now......is this NUTS........or just a good way to save on PM fees?
Thanks
I do something similar, but not quite as drastic. I own a property in NY and live in PA. I use a realtor to fill vacancies, and one of the tenants is the "manager" so to speak, only insomuch as he mows the grass and plows snow. He will also do minor repairs , up to $100 and deduct from his rent.
I find out of State properties to be very easy, if you are not afraid to try it. NY is much more profitable than PA from a cash flow perspective.
Good luck!
I hear what you are saying.......in California, it seems that you need to put down about 20-30% just to get positive CF. Of course, I would rather invest here in the LA area, but with the high prices and difficulty in getting CF, I am forced to look elsewhere.
I just think about this........lets say I did own a property down the street from me. Say one day the plumbling got backed up and I (as a landlord) was responsible for getting it fixed. It doesn't matter if I am just down the street b/c I could not fix it anyway. I would have to call someone out to repair it despite my close proximity to the property. My point is........Getting things fixed is a phone call away.......and technology (i.e., cell phones, fax machines, email, etc.) has made it possible to manage from a distance. On the other hand, I do think that PM can serve a great role in placing tenants and they should be paid accordingly for that service. But after that, are they really necessary? Agree or disagree?
Honestly, I don't like to rent a place that I can't drive to twice in one day comfortably.
The money isn't worth the stress for me.
That sounds like he is using the PM as a leasing agent, why not just get a leasing agent? Might be cheaper...
[addsig]