Out Of State Ownership
Hi everyone I have a 7unit building in Indiana but I live in Illinois the management company that handles the property charges 10% of the rents which is about $250/month I figured I could save this if I could run the property myself. Does anyone have any experience in out of state management and how does it work out for you?
I also have property in Indiana and think it would be difficult for you to manage unless your property is pretty close to you (like Gary,IN). Clearly, I have someone else manage mine, however, I do manage some properties that are about 100 miles away from me. I travel there about every two weeks and have a pretty good support team (handymen, contractors, etc.)
One reason that you may have a bit of a tough time is that you have a 7 unit building. I have found that with SFRs or duplexes, you can get the tenants to do more for themselves and give them more responsibility for looking after the property.
Once you actually spend the time you would have to devote to long distance self-management for seven tenants, $250 will seem like a bargain to pay someone else to do the job.
Self-management from afar may seem easy when all the units are filled, rents are on time, and there are no problems. Wait until you have late pays, you have to serve notice, perform move-out or move-in inspections, and show vacant units. Don't forget the (unplanned) repairs you will have to supervise and the tenant issues that you will need to address. Did I mention the time you will have to devote to court appearances to get an eviction order?
If you are up on the landlord tenant laws, have good leases, a temperment for landlording, and the time to devote to the task, go for it.
Thanks for the reply everybody after long hard thinking ....I'm going to use the management company Thanks for the advice
stronngly suggest you read john t reed's book on property management. he goes into distance mgmt.
he claims he's managed properties NJ from CA.
(of course not everyone with an MBA from harvard manages their own properties)
if you keep ur existing property mgmt, you should still read thebook.
seems to me that $35 per unit is a very small price to pay to have someone else take the 8pm phone calls complaining about anything.
Just trying to do a little simple math here, but if your building is worth $350,000 (i'm trying to guess a little low); and your annual appreciation rate is 2% (again low); you will be increasing about $575/month in value. Seems to me that unless you need a part time job and enjoy windshield time, that paing $250 a month is a really good deal.