Obviously, if you are going to own property outside of your local area you will need someone to manage it for you. Are you going to pick someone out of the yellow pages? Hope your realtor can refer you to someone?
When you hire a management company you will provide them with your contact information – an address and phone number that will clearly show them that you are an out-of-the-area owner.
Who do you think the management company is going to give highest priority to: the out-of-the-area owner or the local owner? Which of these owners is more likely to show up in the doorway of the management company and complain? Which of these owners is more likely to drive by their property and see how it is being maintained and managed?
What can you say to the management company when your property vacates and then sits empty for 2 or 3 months? How do you know that they cleaned the unit and put it back on the market in a timely manner?
What can you say to the management company when your property vacates and, according to them, needs $2500 worth of repairs? Are you going to inspect the property and see what they are talking about? (All you can say is, “OK, make the repairs and I’ll send you a check” and hope they aren’t screwing you over.)
If you finally get fed up with the management company what are you going to do? Fly there and fire them? Who will you replace them with? Back to the yellow pages?
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.
(If you have family or friends in the city where your property is located they might be able to keep an eye on things for you.)
My experience: I turned one of my properties over to a management company not long after purchasing it – they had a maintenance crew on staff so I asked them to do some of the work that was needed – one job was to sand/paint a wrought-iron railing – I happened to be in the area one day so I drove by the property and found two people spray painting my railing with cans of Krylon spray paint – they hadn’t put down any paper or taped anything – I stopped the ‘painters’ from continuing and told the management company not to do anymore of the work I had asked for (I had to pay to have the overspray buffed out of my tenants’ cars) – not long after that incident I had a unit vacate and it needed new linoleum in the kitchen – I picked the flooring and let the management company schedule the install – after the work was done I went to the unit and found that there was a seam in the linoleum about six inches away from the sink (ie, highest wear point in the kitchen and a wet point besides) – how long do you think it would have been before that seam looked like shit and was allowing water to get below the flooring? – the management company insisted that there was nothing wrong with the install (I made them redo the entire floor and put the seam in a more sensible location) – at this point the management company let me out of my contract (they could have refused) and I took over management – if I had been an out-of-area owner, I might have been sued by my tenants because of paint on their cars and I would have been replacing the linoleum in that kitchen much sooner than necessary
