How to Find OUT-OF-STATE RENTAL PROPERTIES to Buy

Sharon Tseung 0:02
This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design the best lives.

Hey guys, it’s Sharon from digital nomad quest. And today we’re gonna talk about how to find property managers out of state. Now, if you guys are new to this channel, welcome, I’m all about teaching how to build passive income, become financially free and design your best lives. So if you guys are interested in that, make sure to subscribe and hit the bell button to be notified of my latest videos. So when it comes to real estate investing, if you want to do everything passively, property managers are must, I would say property managers are important even if they’re not out of state. So if you have a property within where you are from, it’s still pretty crucial to get a property manager if you want to do everything passively. So I actually have a property in Antioch and I’m from the Bay Area. But I still have a property manager, even though it’s an hour drive, I like it because it’s passive, I don’t really have to deal with tenant issues. And property managers usually have the best knowledge when it comes to repairs and maintenance and like costs and things like that. They know how to handle evictions, they know what the best market rents are, and they’re just experts in it. So I prefer to have all hands off. So property managers will help with marketing the property during the tenant screenings, you don’t have to deal with trying to get a vacant property occupied, they’re going to do all the marketing for you. And they’re going to screen the tenants to make sure that they’re qualified tenant that won’t cause a lot of problems. And like I said before, they’re gonna suggest rent prices to charge, they will deal with the repairs and maintenance, because they will have specific vendors that they use, and they’ll be able to coordinate all the repairs. So if a tenant calls in the middle of night, they’re going to be able to kind of handle everything for you, they’re also going to collect the rents for you and pay you afterwards, after they collect the fee. They’re also going to handle evictions. And so it’s just really hands off, if you have a good property management company in place. Now with out of state investing, it’s even more critical to have a solid property management company handle your out of state rental properties in case anything goes wrong, you’re not going to be able to fly there at a moment’s notice, just to like, make sure everything’s okay, they’re going to be your boots on the ground help where they’re gonna tell you everything that’s going on, they’re gonna let you know what repairs are gonna be required. And you don’t need to deal with that you’re just gonna pay that fee when they give you the invoice. So it’s important again, to vet the right property management company. So when you’re trying to find a property management company, think of it as like you’re interviewing a candidate, you’re going to interview a bunch of these companies, and then you’re going to see which one has the best responses. So one of the first ways to do it is to get referrals is probably the best way if you can get referrals from family, friends or agents, that’d be great, because these are people who have already dealt with these companies, and they can recommend these property management companies. So for one of my properties, one of the real estate agents I worked with, they definitely recommended this specific property management company. So I made sure to talk to them and see if they can handle my properties. You always want to get referrals from people you trust. Number two, you’re going to look on online resources like Google, Yelp, and bigger pockets, Google and Yelp, especially they have reviews, right? They have reviews that you can look at. So you can make sure that they have high ratings. When I was looking at a state for property management companies, a lot of them had really low ratings, and it was helpful to see on Google what people were saying. So I’m going to show you an example right now. So say, I’m going to look for a bay area property management company, right, so I’m googling it right now. As you can see, some of these have really low ratings are two star three star, they don’t have that many reviews, you know, obviously these 2.3 are not going to be as favorable as a 4.6 is and 4.8. You know, let’s look at this 1.8 rated property management company. You can see the stars here, you know, this one, one star horrible management, you should read all these reviews and see what you think about it. You know, some of them are good reviews. So that’s why you want to read these and see what you think this one’s probably not good. You can see there’s two one star ratings, what have you read from this company, I hope nothing breaks in a unit because it’ll take them at least a month to fix it, if you bug them every day. See, these are not reviews that I want to see, I want to make sure my property management company will get two pairs quickly, right. So this is like your first line to make sure that the Yelp and the Google reviews are really good. I also mentioned bigger pockets, because that’s a good place to network. So you can find property management companies there you can also find agents as well, that will refer property management companies again. So these are three sites to look at. And then lastly, you’re going to call a bunch of these companies, and then you’re going to interview them. So make sure you’ve read through a bunch of these and then you see what their answers are, because that’s how you’re going to figure out which one’s the best candidate. So I’m gonna list off a bunch of questions that you might want to ask. So first off, I like to get information on the city that I’m trying to invest in. So for example, with the two properties I purchased during quarantine, I made sure to ask these property management companies what they thought about certain neighborhoods, which zip codes to avoid which zip codes to maybe invest in what do they think about, you know, different areas, which areas are B neighborhoods, a neighborhood c neighborhoods, things like that yet information on you know, the city that you choose. So that’s kind of more of the market research that you’re going to do but then afterwards when you’re trying to figure out if this property management company is a good one to use, you’re going to ask stuff like what are your management fees, so Normally, you might get a range from six to 10%. So 6% might be more common in more expensive areas like the Bay Area, 10 percents a bit on the higher side, but it might be worth it if you know they are doing a good job. So actually, for the two properties I got, I have two different property management companies managing those two. And they both charge 10%. Some of them I found to charge 8%. But I saw their ratings, I was kind of worried that they would be bad, these guys had really good reviews. So that’s why I went with the companies that are more expensive. You’re going to ask what services you offer, you want to make sure that they offer everything that you want them to offer. Like all the things that I mentioned earlier, they should definitely cover you should also ask how much experience you guys have like how many rental units they are currently managing, you know, this will give you a good sense of how big their company is and how strong their system is. So for example, if they’ve only managed like five units before, and they’ve only had one year experience, that might be a company that you are not sure about, right? You want a company that has more units that they’re managing, they have good systems in place, and they have many years of experience, you might want to ask them how they determine their rent if you have a property that you already interested in investing, and you might want to ask them how much they think that property can rent for and also ask how they screen their tenants like do they screen certain credit scores like criminal records and things like that? how quickly they can get their tenants. So you want to see how quickly they can make a vacant property occupied, then you want to ask how do they handle repairs? How do they market their properties? Do they do direct payments? Or how do they handle payments. So for my Antioch property, they’re still sending me checks, which is really annoying. I prefer direct deposit. So that’s what the other companies are doing. They are doing direct deposit to my bank account, which should be what people are doing nowadays. You also might want to ask how they handle evictions, which might lead to what’s the most difficult situation that they’ve faced, they might talk about a challenging situation, which will make you understand how much they are able to handle. Other things you might want to ask is how often they visit properties. And do they have tenants that are currently looking to rent like they might have a list already that is ready to look for a property. So this is a decent list of questions that you might want to ask your property management companies. And what I did really was I just called a bunch of these companies and I just checked what their answers were and then comparing all the different companies I was able to kind of narrow down which company I wanted to work with based on you know how much they’re charging and how qualified they were. So I hope you guys enjoyed this episode, please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.

Transcribed by https://otter.ai