
Ask HN: What problems do you face when managing a rental property remotely? - munchieboy
What problems do you face when managing a rental property remotely?
======
mark_l_watson
I have been a landlord for about 35 years, and a remote landlord for 20+.
Since my wife and I are just now moving to another state for my new job, we
just rented our home in Arizona, so we will now have two remote rentals.

My advice: be careful choosing property management agents. Get referrals and
communicate clearly what you expect as far as them quickly fixing problems,
providing receipts, etc.

My meta advice: prefer buying modest homes to live in, not MacMansions, and
try to hang on to them as rentals as you move. It is a good way for someone in
the "middle class" to accrue resources. It is better to live in a modest home
and have separate income property than to just own a huge/expensive house that
you live in.

~~~
kyberias
> It is better to live in a modest home and have separate income property than
> to just own a huge/expensive house that you live in.

Explain this logic, please. How is it "better"? Using which criteria?

~~~
mark_l_watson
Sorry, I should have been more clear. For my wife and I, we value long term
stability, wealth building, and flexibility more than an extravagant home to
live in.

I totally understand people who prefer a better current lifestyle if a large
expensive house makes them happy.

~~~
ajross
Not sure I buy that. The tax and loan guarantee advantages of your primary
residence in the US are huge. It's almost certainly more advantageous in most
markets[1] to put $N of real estate into a single residence worth $N than it
is buy two $N/2 homes and try to rent one. Details matter, talk to an
accountant, yada yada.

[1] That is, assuming a decent appreciation of home values. In Detroit, say,
this advice wouldn't hold because the homes are worthless investments and you
want the rent income instead.

~~~
trcollinson
This is a bit of a naive view of the tax view within the US. I can't and won't
compare the tax advantages of primary residences within the US to other
countries, and they are good you're right. However, loan interest can be
deducted as an expense on loans on rental properties. [1] This is not the only
expense that can be deducted. Almost all expenses including your time can be
deducted if you set things up properly.

As an investment vehicle, there are very few investments which can be
diversified as much as rental properties. In my experience there are also very
few investments with the level of return of rental properties. [2]

[1] I am not a lawyer, a CPA, or a tax attorney. I do have all three of these
people on retainer. If you would like to know how set this up and make sure to
get the most advantageous tax positions and financial positions from your
investments, please hire people like this to tell you what to do. Also, do not
forget to interview a few attorneys and tax professionals before hiring.

[2] My experience: I currently own 12 properties of three different rental
categories in 3 different states.

------
FlopV
Are we talking long term rentals or short term rentals? They are both
different animals.

Long term rentals have less issues. I'd say venting tenants if you are doing
it yourself can be tough, although you can work with an agent if you choose.

Dealing with issues that are small, but need to be done, for example, dealing
with a clogged drain, or dealing with a broken toilet in the middle of the
night, are tough to manage. You can call a plumber, but prepared to spend a
lot of money for something that can be done yourself without much trouble.

Short term rentals the biggest issues I've seen is the check in/check out
process, cleaning, and being able to adjust to client expecations.

Some renters will have issues finding the location for a variety of reasons
despite providing directions. This goes for finding wifi passwords, not
knowing how or when to checkout, etc. Being there helps enforce these policies
and deal with these small matters.

As others have said, prepping the unit with consistent quality can be tough as
finding reliable staff isn't easy and their is high turnover.

For some context, my short term rentals are in the Caribbean, my long term
rentals in the states.

~~~
charlesdm
How are your returns in the Carribean vs the US? In some cities, short term
rentals in particular can offer great returns, but definitely not always the
case.

~~~
FlopV
I don't have a years worth of data to compare just yet. During tourist season,
it's obviously more than what I could get than long term. This is about 2.5x
as much profit than the long term, but during slow season, it's breaking even
what a long term tenant would be in there for.

I'd also need to account for renting it for free to friends and family. I
agree that short term in other US cities would be great, where my other
properties are, I don't think I'd get much value out of it, especially when
I'm usually in the USVI myself.

------
repiret
I've never sold a home, I just rent them out when I move. I've done long
distance rentals both myself and with an agent. Finding a good agent is easier
than finding a good tenant, and good tenants move out eventually and you have
to find another.

A good agent will have a handyman on staff so you can get simple stuff fixed
for a reasonable price, a network of contractors that do good work at a good
price, and know what channels to advertise in to get good tenants in the local
market. They also know the local market better, which means they can better
optimize price vs time empty, and depending on how bad you are at that, that
optimization alone will pay their commission.

------
mchannon
Reliable cleaning staff is definitely the biggest challenge.

It's all too easy for unsupervised people to flake out hours before you have
some renters with high expectations due to move in. Some may have the courtesy
to let you know beforehand, others after the fact, and still others will bill
you anyway.

Others may not have a consistent work ethic (spit and wipe a few spots and
spend the next three hours checking Facebook).

Getting the reliability numbers up is very expensive. I'm starting to see
maintenance staff take before-and-after pictures as part of their work.

~~~
kazinator
Supervision of cleaners, maintainers and repair contractors is a job for the
business of _property management_.

Those people can't slack off or do a crap job if they have to report to a
management company, with which they aren't affiliated in any way.

Property management is a solved problem; it's a problem that the very rich
have (or big corporations) that own many properties in many locations. Even if
you own a bunch of properties in the same metropolitan area, the same one
where you live (so technically not remote), you can't be personally checking
on everything that is going on in all of them; when on Earth will you have
time for afternoon golf?

It's a special case of the structure of any big business. Someone making fries
at MacDonald's cannot slack off simply because the CEO of MacDonald's is on
the other side of the world somewhere.

~~~
jaggederest
The question posed here though is explicitly one about problems experienced
operating that business though. If you're managing a property, remote or no,
you're doing _property management_.

------
tchaffee
Reliable staff for just about any task. Before managing remotely I would have
two reliable contractors for every type of job you might ever need: plumber,
general contracting, cleaning, management, accounting, and legal. Having a
trustworthy manager (and a backup) who can respond to emergencies is a huge
help, and worth paying top money. Someone gets stuck without a key at 2am and
you want to avoid the renter breaking a window or door? A good manager can
resolve these types of things and you won't even know until the next day.

When we did short term rentals we even had the manager greet the new tenants,
and take pictures in front of them, as well as meeting them for departure.

It's also worth it to set up a local telephone number that forwards to your
remote number so everyone can still reach you. Unpredictable stuff does
happen, and if it is something costly or big, you want to be in the loop.

Some people are going to take advantage of you, or at least try. Budget some
extra money for this. Insurance may replace things eventually, but if you want
to keep renting and your property description says there is a TV, you'll need
to replace the stolen one right away.

~~~
mars4rp
or buy a home warranty for less than $500 a year and with a phone call and
flat fee they will send somebody to fix it!

------
projectramo
This just echoes what everyone else says.

1\. A living space just requires a lot of physical labor: gardening, repairs,
maintain, etc.

2\. You can outsource a lot and still have holes. Example: property management
company handles everything. The dishwasher breaks. You order a new one. How do
you co-ordinate that the installer and the delivery is at the same time? What
if the person there doesn't want to deal with it? Can you hire someone to let
the delivery in and store it till the other person comes? What if they don't
show up on time?

Imagine scenario #2 x 100 over and over again.

------
Overtonwindow
1) Bad property management company; response to situations; payment to me. 2)
Demanding tenant; breaking things, bullying contractors, incurring costs.

Biggest problem: Property management company. I don't trust them to manage my
house, and see that the tenant doesn't destroy it. A lot of my problems are
things I never worried about, or thought needed to be fixed immediately, but
my property management company has screwed me multiple times, but I can't
afford to break the contract. My tenant is demanding, and exposing glaring
holes in the lease.

Find a reputable property management company and get references. Talk to the
home owners, real home owners, not property investors. Require the company to
send your payment within the first month, don't let them keep that and earn
interest off of it, choosing to remit next month, etc. Include strong clauses
in the lease about property and appliance damage, detailed instructions in the
lease for tenant maintenance (i.e. air filters), expand the section on pest
control to explicitly state what you will, and won't do. Buy warranties on
your central air, and if you can find a good place for it, on your appliances.
Trust me on this one. Meet, qualify, and set up your own agreements with
handymen, contractors, etc. Don't let the property management company do this
unless you are absolutely clear on the costs, etc.

My saving graces for this house if my contractor, who is also the handyman,
but has a rolodex of reputable people for all situations. Find someone like
this, preferably an independent contractor in your area, and get to know them.
Worth their weight in gold.

------
garethsprice
Self-managed a long term (1 year lease) rental property remotely for 4 years,
family worked in short-term rentals so I have some experience of that market
too.

Main problem was peace of mind, knowing that tenants were there & not causing
issues. Had a friend in the local area drive by every so often to make sure
the place was in good condition. Let one do their own gardening, they let the
place get run down so in the end mandated lawn/pool service for the tenants.
The gardener was good at alerting us to issues.

Tenant changeover was hard and usually necessitated a flight down for a week
or two to show the property (to a pre-arranged appointment list) and ensure
move-in/move-out went smoothly.

Co-ordination was difficult sometimes (tenant reports an issue, get vendors
out to triple-bid repairs, arrange for tenant to be there to let in vendors
both during bidding and doing the work). Ongoing maintenance issues (the pool
constantly leaked) were difficult to evaluate properly & had to trust our
contractors.

Considered a property management firm but at 10% of the gross rent (and fees
to find/place new tenants) on a property we were not cashflowing on we chose
to manage it ourselves and it worked out alright. Short term I'd definitely
want a local agent, too much to go wrong.

------
xsmasher
Generic advice for being a landlord.

Screen your tenants. Better to be vacant for months than let a bad tenant
trash the place.

Make your money when you buy. Don't overpay and rely on appreciation. The
property should cash flow from day one.

------
stevekemp
I recently moved from Scotland to Finland, and kept my (paid off) property to
rent. The biggest annoyance was that the property management company I picked
couldn't be trusted.

Despite having positive reviews, even from friends, they were just terrible at
dealing with any problems. I expect that all properties would have leaking
roof, a failing appliance, or similar, over a long enough time. But each time
something broke the company handled it in a terrible fashion.

From promising, but not delivering, pictures of damage, to getting estimates
for repairs that were almost 100% bogus. The list goes on and on.

Of course changing management company once you've already got tenants in, and
you're abroad is a pain in the ass.

Beyond that though I found that since I was abroad I was suddenly classified
as a "non-resident landlord" which meant my income was taxed pretty harshly. I
should have expected that, but it was just another surprise.

Largely to cut down on tax and currency-conversion woes I put the property on
the market, and now I'm waiting for the sale to complete. Good news? The
property was sold for a pile of cash. Again though taxes will be a pain, and
I'll have to pay capital gains tax for the first time in my life. God help me
if the brexit fiasco causes the pound to drop again, because that'll wipe out
a lot of money.

------
TACIXAT
Considering either selling my house or keeping it as a rental. Trustworthiness
and reliability of the management company are my greatest concerns. Will they
be available when a tenant has an issue? Will they provide receipts when
something breaks?

It seems like too much of a headache, so I will likely sell the house.

------
Sleeep
For people doing long distance single family detached house rentals, how do
you make sure the general maintenance gets done? Things like lawn mowing,
gutter cleaning, chimney sweeping, bush trimming, furnace serving, weeding
around the foundation (damn Maple trees), snow removal, etc?

This seems like a lot to manage and I wouldn't trust a tenant to do it and
some stuff requires tenant coordination. Seems like an annoying logistic
problem to solve.

------
rcazangi
A friend who has been a landlord for many years suggested that I hire a home
warranty for my rentals. I have been doing that for about 1 year now and it's
working out fine. You pay an annual membership and then a fixed fee for every
claim. They handle everything from finding a contractor, to dispatching and
paying the service costs.

------
ajamesm
As someone who owns a couple rental units, the prospect of being a rent-
seeking gentrifier or a slumlord

------
jogjayr
Follow-up question (and I'm happy to create a different Ask HN, since this is
kind of hijacking): How do you find, evaluate and purchase a good rental
property remotely?

------
seasonalgrit
"What problems do you have with absentee landlords that don't even live the
same state as you?"

------
larrik
Are talking about short-term airbnb type stuff, or like a long-term apartment
or house?

------
taylorhou
competent local staff. a single tenant focused front line staff member can
change the whole entire equation for you.

i remotely manage hundreds of SFR & MFR units.

~~~
Sleeep
How do you find such a person and how do you vet them? Do they take landlords
with only a single property?

------
mcappleton
Getting it cleaned by somebody who won't steal your stuff is a challenge. They
can just say that it was taken by the renter.

~~~
EADGBE
You mean like copper piping?

Or is your rental furnished?

~~~
mcappleton
Lol... I'm talking about a furnished one. A relative of mine had an furnished
unit they rented out and I remember this was an issue. They paid a pretty
expensive cleaner as far as cleaners go, but thought it was worth it.

