In my real estate group, good property management companies are very difficult to find and the ones I have employed are ones that I asked my group to refer or were referred by my real estate agents. And from there I interviewed at least three. Not a perfect system, I admit, but at least better than a google search or a search in the yellow pages. For my position, I do have a backup property manager if I decide the one I have is not working out for me. I do have a better position than most, because I have a network of investors that I talk to and we refer a lot of people to each other (mortgage brokers, real estate agents, property managers, attorneys). I would say without this real estate group, I probably would be running into the same problems you’ve been experiencing.
(which is why I have yet to invest in North Carolina, because I have heard that the property managers there are all pretty bad).
I have two property managers, one in Denver, one in South Carolina. The South Carolina one had one unit left vacant for a few months, but I cut them slack because it was the Christmas holidays and there weren’t a lot of people running around trying to get an apartment at the time. The one in Denver, the 30 year old boiler went out on me a WEEK after I bought the property, and replacing it cost $8000. SUCKED. But I had them send me a picture of it, send me the work order and exact scope of what was replaced (as well as talk to the company and checked out the company who replaced the boiler). Every year, one requirement I have for the property manager is to go around and take pictures of the property so that I know what’s going on.
So… it helps to have a network, it helps to have others in the same boat as you, but at the end of it, there are a lot of hassles and risks when you do any investment, stock market or real estate. I do property management myself for my two San Diego properties. My tenants are sometimes late for their payments, they ask me to come by because they can’t light the pilot light, and during Christmas, I had to fix up one property because the tenant left, stiffed me for two months rent, and then left the place in a terrible condition that I had to fix up. I mean, I already have a day job. Pretty much ruined my Christmas. So whether out-of-state or in-state, stuff happens.
But at the end of it, I still do it because it will provide me the best way to use money and there are too many advantages to it otherwise. By at least going to out-of-state, I can diversify out of the “bubble”, continue to make more money.
Bottom line, IMO, is that you are setting yourself up for problems by being an out-of-the-area owner. You might get lucky and never have any problems – or you might be unlucky and end up losing your ass on a property that you shouldn’t have bought in the first place.
No risk, no reward.
So certainly take a look at 4plex’s stories and examine it. If what he goes through seems like too much work, it seems like it’s just too much trouble, by all means, do not invest in real estate out of state. It’s not a get-rich-quick thing at all. It’s a lot of work and a lot of hassle.
But like everything in life, if you prepare yourself, do your homework, work hard, America will reward you for it.
