Posted by mike on November 19, 2000 at 01:35:50:
Let me share a few experiences I have had with being an absentee landlord.
I have been in that position where I had been an absentee landlord on several occasions. The first two times, I was renting my personal residence while I took jobs elsewhere. In the second instance I was in another country. During these first two times, as a matter of necessity, I used property management companies. My experience was positive. Although they charged a commission of up to 10%, they were also able to rent the houses for more than I could, so the commission was offset by the increased rent they commanded.
In a third instance when I was an absentee landlord, I bought a house for investment purposes. Knowing that I was going to be out of town, I looked at my target market of renters. I wanted a property that would: 1. attract families with secure employment 2. have a low turnover rate 3. require relatively low maintenance 4. be easy to resell at some future date.
I purchased a 20 year old, 3 bedroom, full basement house with covered parking and a fenced yard in a popular suburb, close to schools and shopping, and 10 minute drive to downtown. The house was amongst the lowest priced (due to square footage, not condition) on the street. The reason: the house would be attractive to families, but they would need a car to get around - be able to afford a car indicates some security in a job, families with school aged children are hesitant to move in the middle of the school year, and affordability made it easy to resell. I kept the house for five years, and had five renters, all of whom stayed almost exactly a year.
My last venture into property managers was a disaster. I own a 6-plex consisting of 6 townhouse units. While these are attractive to families, the area of town has greater transiency and every couple of months or so I have to find a new renter. I initially used a property manager, but they were not as quick at renting and at one point I had 3 empty and another who had given notice. That was when I took matters into my own hands and started to look after the management myself. I haven’t missed a single day’s rent this calendar year!
Back to your situation - I would look for a house with features that appeal to families to reduce turnover, I would try to find it in a popular (and safe) neighbourhood, I would try to buy as new as I could afford to reduce maintenance, and finally I would check out property management firms and have a couple come by and look at the house. I would also become as famliar as I could in the local rental market. Carleton Sheets recommends walking around the target neighborhood and talking to residents (find someone working in the garden, washing their car, walking their dog…) - asking questions like How do you like living in the area? Do you rent or own the house? Do you know of any other renters in the area? Do you know what renters are paying for rent?
Good luck, and let me know how you make out…