How to Manage Out of State Rental Property

how to manage out of state rental property.I get asked quite a bit whether a real estate investor should buy out of state rental properties.  When you do not live in the same state, or even within a few miles of your rentals property, things can get very complicated.  You have to learn how to manage out of state rental property, or learn how to manage them when you are out of state.

How do you turn and show a property?  How do you check to see of a simple repair is needed?  Can you just flip a circuit breaker, or do you need to call in a electrician?

My rentals are all within about 10 miles of my own home, most are within 3 miles.  Now that I no longer have a full-time job, I do not want to be tied to my home base.  There are business meetings, and conventions in out of state areas that I may want to attend.  I may want to set up an off-site corporate meeting for my own company, and yet still manage the properties myself.

Here is a recent example of how I handled several repairs while I was on a trip to Branson, MO.

Keep in mind, that I often go weeks between tenant calls.  Yet, when you are not around, it seems that the issues popup.  To be an absentee landlord, and continue to manage your own properties, you need internet or phone access at all times.

Hiring a Property Manager

I could have hired a property manager.  I have already written about the downsides of using a property manager.

So I prefer to manage my property myself.  It does mean that I need top pay attention to texts and calls while I am away.  Most people do not turn their phones off anyway, and hate it when they are in a place where there is no cell reception.

First Problem: Plumbing Issue $60

I had not but barely left on my trip, like not even a day, and a tenant texted me about her bathroom vanity sink leaking.  She actually investigated the leak a bit and said it was between the faucet and hot water connection.

I inquired if it was just a drip, and if it happened only when water goes down the drain.   Was it a constant drip, or a steady stream?  She said it only dripped with the water on.  This tenant had just moved in, so I had already looked everything over and I knew it was 100% just a month or so previously.  I had installed a vinyl sheet under the vanity sink, so a small amount of water was not going to hurt anything, but I still did not want water leaking anywhere.

After I thought about my question, of course water would only be leaking when the water was on.  It could still be from a drain, or a faucet supply.  In any case, she knew I was aware of the issue.

The Decision

I had two choices, call a plumber, or let it wait.  Water issues are not a thing to wait on.  So I had to inquire again.  I asked if she could put a bucket under the drip until I got back in town, and she said “it was not an emergency, and could wait”.  She already had a bucket under the leak.

A bullet dodged, for now.  It was still a week before I would be able to get back in town, I had to hope the leak stayed a drip, and no other larger issues came from it.  A plumber would charge a lot more for a faucet that I could buy at Home Depot, and it may still be a simple drain issue.

When I got back from my trip, I replaced the faucet with a new Moen Adler faucet.  I use the same faucets on all my rentals and they work great.  It took about an hour, and cost ~$60.  As a downside, I had to re-do the trap due to the different drain stopper configuration.  Because of this drain stopper change, I had a small leak from the thread of the drain pipe, and had to come back to seal the threads a couple of days later.

Second Problem: Plumbing Issue Two…!  $239

PlumbingLeakTwo days in to my trip, another plumbing issue came up.  The tenant in the lower apartment texted me about his kitchen sink flooding with water from the dishwasher and also the upstairs sink.  There was also water leaking in the garage from the leak.

That kind of repair is not really an emergency, although it is gross.  Really gross.  It is nearly an emergency.  I just bought a nice Ridgid K-400 power drain cleaner, with an auto-feed, and I did not want to call a plumber.  I already used the machine a few times, so it had already paid for itself, but I like to use it to recover more of my investment.

This issue really could not wait.  I had to call a plumber.  I could call someone off Craig’s list.  Or a plumber that I knew that may not be as responsive.  Or Rotor Rooter.   Rotor Rooter is probably the golden standard.  They clean drains and have a warranty.  They come out on Christmas Eve, or Sunday’s, without an extra charge.  The problem is, the extra charge is already built in on every call…

I have use the $99 drain clean out companies, and there is always an extra charge they need to perform.  It never equals $99 per drain.  So I usually rule them out.

Rotor Rooter to the Rescue

Rotor Rooter has on-line coupons for $50 off any drain cleaning service, so that helps.  I called them, and gave them the tenants contact information.  They came out that same day and cleaned the drain, and all was well, or so I thought.

The plumber told me that the plumbing drain line was also leaking.  After the guy cleaned the drain, he wanted to schedule a plumber to fix the drain line leak, replace pipes, do some restoration for the Sheetrock that got wet in the garage ceiling.  I suspect it would have been another $2,000 or more had I gave the go-ahead on the repairs.

I can do those plumbing repairs, and the leak was almost gone after the clog was cleared, and it was only leaking into the concrete floor garage.  All non-issues.  And the tenant was not worried about them either.

Do it Right the First Time

About three days later, the same problem occurred, and I had to call Rotor Rooter again.  They had the previous drain clean-out coded as a non-warrantied item, so I had to fight them just a bit.  I had the same problem, just two days after the first issue, how can it be not-warrantied?

They agreed to come out and gave me a lot of warnings about they are not responsible for broken pipes, etc.  This building was built in 1985.  It has solid PVC and ABS drain pipes.  I was not worried about it and gave them the go-ahead.  They cleaned it again, no charge, and all has been well.

When I got back, I saw an ABS plumbing joint that was bad and was leaking.  As a first attempt, I tried the simple fix first, after opening up several areas of sheetrock.  I was able to clean and re-glue the joint (i.e. slather the joint with glue).  I also added a small piece of ABS to help seal the joint.  It is not a 100% fix, but it appears to be working.  I can always drain the water heater and move it, and then cut the many joints and traps out and replace them.  It will be much easier if I do not have a tenant in the unit.  A 30-minute fix, vs a 8-hour fix.  Worse case, I have wasted 30 minutes.

Third Issue, Air Conditioner $0

It was a smoking hot week when I was gone.  My tenants had just moved in a couple of months prior.  In this apartment, I had already installed a new furnace, and all was relatively well.  I had a small issue with the thermostat I was aware of, but I gave the tenants a ‘work around’ until I got back.  I thought there was a short in the thermostat wire, and I needed to change the wire.

They texted me about A/C not getting into one of the bedrooms and the bathroom.  I responded by telling them I was out of town, and gave them a few suggestions that would help.  Leaving the furnace room door open might help the airflow.  Leaving the bedroom door open might help.  Opening up any vent registers will also help.

Since she was not in dire need of help, and I was only a couple of days until I would be back from my trip, I told her I would look at it when I got back.

The A/C Fix is In

When I arrived back in town, I was able to remove the register, and open the duct flap.  I am not 100% sure why these ducts were used, rather than a register cover that is adjustable from the outside.  I dreaded going up in the attic, where it would be incredibly warm, to see what the issue would be, if it was not this simple fix.  An A/C guy would have cost plenty more.

I also fixed my thermostat wire issue, which turns out that it was just wired incorrectly.  I blame this one the previous tenants, as they were the ones with the original problem.  They must have attempted to do something, and wired it incorrectly.  Wiring doesn’t change by itself.

So there you have it.  A few issues, all resolved by phone or by waiting and fixing when you have the availability.  It saves a ton of money!

Do you have rentals that are not close by?  How would you have handled any of my issues?  If you were a tenant, would you have been satisfied with my responses?

 

10 Replies to “How to Manage Out of State Rental Property”

    1. Thank you for reading!

      You can do most items with the help of a property manager. If you have an apartment turn, make the trip or hire a professional. just show up towards the end to make sure all is what you paid for. There are some functions that you need “boots on the ground”.

  1. I have a couple rental homes out of state and I’ve always used PMs to manage them. I never wanted to deal with the tenant issues since I’m so far away. Plus, I’d prefer not to get called. 🙂 Just this past month I had to evict a tenant for non-payment of rent. The PM company did a fantastic job of the entire process and I simply had to reply to a few emails.

    However, it sounds like you’ve got a great system and the time to manage effectively. Kudos to you, sir! 🙂

    1. Thank you for reading!

      A PM can be great. Did you ever wonder why the PM brought in someone that needed to be evicted? Why did they not get a good tenant to begin with? Did they want to get their commission and quit showing the unit? Do they have any written tenant screening criteria in place? Evictions are for rookies, get better tenants to begin with.

      Also, did you ever think about how much, in terms of percentage of profits, goes to the PM? generally it is well above 25% of the total profit.

      1. Yeah, that’s an interesting premise about preventing evictions from the get-go.

        In defense of the PM, they do always disclose the tenant’s credit and leave that choice up to me. If it’s a riskier proposition, I’ll ask the PM to collect a larger security deposit upfront.

        Even if I could do the job better myself, I still like that I don’t have to worry about the details even if it erodes the profits. But, that’s just me. 🙂

        1. As long as you are aware of how to do the tenant management, hiring it out is OK. You can verify that the PM is doing the job correctly. Far to often people think the PM is the ‘expert’, when they have little or no training, and never had a rental property they owned themselves.

  2. This is a great post, I live in Florida but I hate it here, but I have 4 soon to be 5 rentals, and managing from out of town is a little scary to me. You are right about evictions are a rookie mistake once I learned how to properly screen a tenant, I was in much better shape

  3. It was always hard to manage my portfolio when I was out of town, but then when I moved it became easier.

    When you are just traveling, you don’t want to spend the money when you could just do it yourself. It’s a constant struggle.

    I moved from Massachusetts to Texas and couldn’t physically manage my properties anymore. When you move and can’t go there anymore, you just build an average cost into your numbers. If you beat the estimate you are happy.

    A lot of it is about perception really.

    1. Thank you for reading!

      At some point, I will have to bite the bullet and pay for more services as I get older and more adventurous. I want to spend more time away from Minnesota, and potentially move to a new location. So I guess it’s inevitable. Maybe after I get this mortgage paid off, and I have a year of FIRE under my belt, I will be more comfortable with it.

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