Are You Still Wary About Investing in Out of State Rental Properties?

January 28th, 2020

One of the biggest concerns that many investors have is the idea of investing in a property that they’ve never set eyes on. First time investors have a particularly tough time dealing with the notion of investing out of state. The reasons make sense. For years, real estate investors managed their own properties. Property management companies didn’t become well-known and popular until relatively recently.

A Brief History of Property Management

In the 1800s, it was a booming market for real estate investors. A shortage of housing meant that most people rented their apartments. Owners took care of these units themselves; collecting rent and doing repairs, etc. In the early 20th century, successful property owners had too many properties to take care of by themselves, so the idea of caretakers began to evolve. These were people who knew a little bit about repairs and were willing to collect rents and do repairs in exchange for a free or heavily subsidized rental unit in the building they cared for. Note that this position still exists today in certain pockets of the country. Sometimes this position is called “the super.” As property owners became more sophisticated, an entire industry was borne. By the mid to late 1900’s, the full-service property management came into existence. Even the early versions of these companies offered a lot more than just collecting rents and fixing screen doors. They would find tenants for property owners and make sure a property was being looked after for an absentee landlord.

Preconceived Notions of the Attention Needed

Now those many years of self-managing properties became ingrained in society. Properties do require quite a bit of maintenance. Hinges need to be oiled, water heaters need to be replaced and so on. Many property owners complained about the “headaches” involved with being a landlord. Who did they complain to? They complained to their spouses, to their neighbors, their bosses and anyone else who would listen. Even the children heard how horrible it was to be a landlord. So those ideas about what it was like to be a landlord were perpetuated throughout society and down through the generations. Children grew up to avoid being a landlord at all cost, “Ugh, I saw what my father went through. It was awful,” they would say. Even then, there were more slimmed down versions of property managers available, but they weren’t widely used or widely known.

The Flawed Thinking About Being a Landlord

Even savvy investors today are often the victims of flawed thinking when it comes to being a landlord. It’s very, very hard for many people to wrap their heads around the notion of not living near the property they own. They still feel that they need to be able to drive there “in case of emergency” or just to “check up on things.” It’s so hard for many people to conceive of leaving the care and maintenance of an expensive investment in the hands of a property management team they’ve never met face to face. It’s even more impossible for some people to imagine obtaining a loan and buying a property they may never see in person because it’s out of state. But this is all due to the flawed thinking about being a landlord that has been passed down from generation to generation.

What Experienced Real Estate Investors Realize

The markets today are very different than they were in the 19th century and even in the 20th century. Today, many markets where real estate investors live are simply not cash flowing markets. What does this mean? It means that if you want to invest in real estate in a place like, say, San Francisco, you’re going to find it very, very hard to find something affordable enough where you can make passive income each month from it. Other major cities where real estate investors flocked to just a couple of years ago are quickly losing their appeal for real estate investment purposes. What experienced real estate investors realize is that in order to find cash flowing rentals, going out of state is a necessity. And they also know it’s an easy proposition, due to the existence of full-service property managers.


As you’ve read from us before, full-service property managers take care of everything for your out of state rental property. You don’t have to worry about collecting rents, finding tenants, getting leases signed, repairing things or having the place cleaned in between tenants. And you don’t have to worry about making “emergency visits” or doing drive bys to make the place hasn’t burned down.


Don’t let out of date ideas about what it takes to be a landlord keep you from getting in on one of the best passive income opportunities that exists today. Investing in out of state rentals is safe, popular and frankly, a smart idea. If you’d like more information about how to buy out of state rental properties, please contact us today.

  1. I’ve heard of Property Management companies over charging out of state owners for house repairs and maintenance upkeeps. The owners aren’t present to verify of repairs needed or to shop around with several companies. How does an out of state property owner lessened this risk?

    1. Hey Ozzie, Great question. First, if you “inherited” the property management company from a trusted turnkey rental company, you can very likely trust the PM company. If you’re starting from scratch working with a new PM, you need to do your due diligence. You’re going to be asking for testimonials and then calling those references to verify the PM’s integrity. You’re also going to be on the phone with several PMs so you can get a sense of who’s willing to answer all your questions. Second, an honest PM will always provide you with receipts for labor and materials so you A) know that you’re getting what you pay for and B) have those receipts for your tax deductions. Thanks for your interest!

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