Thursday, October 26, 2017

Living Far Away from Rentals - Yep, Doable!

In my experience living far away from rentals is doable and can be successful. Here is a summary of my experiences so far.

Long Distance Rentals - What Worked For Me

  • Working Full Time plus Investing - For about three years, my husband and I have self-managed our properties remotely and both worked full time. We got to 12 units at this pace. I was lucky because I had an amazing job at a really great California company and all of my managers trusted me and allowed to work from home. Because of the time difference with California, I was able to do houses related stuff in the morning from 9 am to 12 noon and do my actual job from 12 noon to 10 pm.

  • Juggling Family and Investing - This is very doable now because our kids got older and are fairly self-sufficient. Older boys are happy to watch the youngest one. When we started investing, kids were 14, 12, and 4. We were very lucky to have lots of support from friends and family who we often asked to pick up/drop off kids to and from activities. I am hugely grateful to my mom, dad, parents-in-law, sister-in-law and best friends. THANK YOU GUYS! Love and hugs.

  • Remote Property Management - This worked as well because all our properties were located within an hour drive. We had to go lots of times mainly because at the beginning we did all of the work ourselves: cleaning, painting, renovating, fixing, looking for and selecting tenants, giving notices and collecting rent.

  • Tenant Relationships - This worked great every time when we chose great tenants. A couple of times we made mistakes and chose a bad tenant. Once you get yourself a bad tenant, nothing helps until you fix your mistake :)

  • Collecting Rent - This worked! We use Interac online payments in 90% of cases. Remaining tenants mail us a check to a PO Box or provide post dated checks ahead of time. We only have 1 tenant that we historically have allowed paying in cash. It's on my to-do list to work with the tenant and figure out a better payment solution, so that we don't have to go in person every month.

  • Audible & Time with my Husband - When I drive to the properties by myself, I love listening to audio books. Sometimes, I wish I could drive more to finish a good book sooner! If we go together with my husband, we love chatting about our properties, plans, mistakes, problems, and what we learned from recent meetups, events, books or news. This makes the trips fun.

Long Distance Rentals - What Did Not Work

  • Couldn't Self-Manage Properties that are 3 hours away - We recently got several properties that are 3-hour drive away. It takes a full tank of gas to go there and back. And it takes a whole day time-wise! Property management company charges less than that per unit per month. For each of these properties, it is more cost and time effective to use a property management company instead of self-managing.

  • Couldn't Handle Career Promotion and Investing - At the start of 2017, I got a new day job and was assigned to a very exciting global project.  I overestimated my abilities and couldn't handle job requirements, long work days, 1-2 hour commute each way to the office three times a week, plus family and investing. This led to me leaving my day job.

  • Cost of Gas & Time - Over the three years, I haven't been tracking actual cost of travel for each property or put a $ amount on the time spent doing various jobs ourselves. If I did that, I'm pretty sure cash flow would be negative. Going forward and as the number of properties increases, my goal is to outsource property management whenever possible and use other people's time. The trick will be stay cash flow positive.

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