Is being an out of state landlord feasible?

rwanger · #1 03-24-2006, 11:18 AM

I've been reading Rich Dad, Poor Dad, which has been an extremely motivating read. I'm the type of guy who has been moving around every few years, so I don't stay in the same city, or even region of the country for very long.

I also live in Boston right now, and I'm not that amped about the real estate market here currently.

Assuming you can put in the time necessary to acquire them, is it feasible to buy properties and rent them out even though you might live 1000 miles away? I'm sure there has to be people doing this, and I'm curious how it works. Do you have a local person who manages the property? Do you have a regular local fix-it guy who does work for you?

How much harder is it to do from a distance? If you owned a few properties in the city where you live, would you necessarily sell them if you moved to another city?

Thanks

ElaineMonster · #2 03-24-2006, 12:54 PM

Rental management companies can find you tenants and take care of repairs. They usually charge about 10% of the rent.

Indiana · #3 03-24-2006, 02:02 PM

Ditto. Go with a good property management group. Mine charges 7% for a condo I own.

Indy

talentdeficit · #4 03-24-2006, 04:33 PM

i live in vancouver and own a condo in san jose, california. a property management company charges me 8.4% of the rent to handle basically everything, including routine maintenance. i haven't even seen the property since i bought it a year and half ago.

rwanger · #5 03-24-2006, 05:02 PM

[ QUOTE ]
i live in vancouver and own a condo in san jose, california. a property management company charges me 8.4% of the rent to handle basically everything, including routine maintenance. i haven't even seen the property since i bought it a year and half ago.

[/ QUOTE ]

That sounds like my kind of investment. Maybe this is a dumb question, but if it's easy to buy a place, then start renting it out immediately for a positive cash flow (I'm simplifying obviously), why aren't the management companies just buying these properties themselves?

prohornblower · #6 03-24-2006, 07:03 PM

Hire a management company to run the building?

Isn't this commonplace?

If you are talking small buildings, I'm not sure what to tell you. I know with bigger office buildings the usual MO is that someone else runs things, and maybe you drop in now and then to make sure they're doing their job???

prohornblower · #7 03-24-2006, 07:05 PM

[ QUOTE ]
[ QUOTE ]
i live in vancouver and own a condo in san jose, california. a property management company charges me 8.4% of the rent to handle basically everything, including routine maintenance. i haven't even seen the property since i bought it a year and half ago.

[/ QUOTE ]

That sounds like my kind of investment. Maybe this is a dumb question, but if it's easy to buy a place, then start renting it out immediately for a positive cash flow (I'm simplifying obviously), why aren't the management companies just buying these properties themselves?

[/ QUOTE ]

Liabilty. And they don't have the capital. They stick with what they know how to do...manage.

talentdeficit · #8 03-24-2006, 07:24 PM

because they get 8.4% of the rental value of the property with no risk. and they can manage a lot more properties (for basically zero cost beyond a maintenance guy, a book keeper and a phone line) than they could afford to own.

Dale Dough · #9 03-26-2006, 10:54 PM

What kind of liability? Is this really a reason not to be a landlord, or is is easy/cheap to insure agaisnt anything that might come up?

Dale Dough · #10 03-26-2006, 10:57 PM

Ok, I realize this question is easily research-able, but (and I'm assuming you're Canadian) how is the procedure of buying a property in the U.S. different for you as a foreigner?