Realty Times | Mar 14, 2024
Out-of-state rental properties can provide passive income when managed properly, but effective remote oversight requires thoughtful planning. Self-managing owners face numerous pitfalls and lack professional support. By contrast, done-for-you companies like REI Nation apply proven systems to maximize returns while minimizing owner burdens across large portfolios.
This article navigates the complex territory of investing in out-of-state rental properties, contrasting the hands-on approach of self-managing owners with the streamlined, worry-free model offered by professional management companies like REI Nation. We'll explore the inherent challenges of DIY property management and how specialized firms can significantly reduce the burden on investors, ensuring a smoother, more profitable experience.
The Allure and Obstacles of DIY
“With smart phones and laptops, managing a rental property seems easy these days,” said Kent Clothier Sr., CEO of REI Nation. “You can video chat with residents, accept online payments, and monitor security cameras from anywhere. But once emergencies strike or multiple issues cascade, even tech-savvy owners get overwhelmed trying to remotely control the chaos.”
Attracted by dreams of easy passive income, many investors opt to self-manage small rental portfolios without understanding the skill and effort involved. When issues inevitably arise, they scramble to coordinate repairs, communicate with residents, adjust lease terms, screen applicants, oversee contractors, and handle a spectrum of other responsibilities foreign to amateur landlords. Recovery costs rapidly escalate.
“Even basic administrative tasks like invoice processing, documentation, and payment notices become burdensome tracking just a few properties without specialized software and standardized workflows,” added Clothier. “Scaling while keeping costs low requires systems built specifically to manage large portfolios.”
Over time, the notion of ‘passive’ income governed by ‘small’ duties reveals itself as misguided. Deluged owners lament nights and weekends consumed by handling operational crises without built-in support systems to lighten loads.
Common Pain Points
Relying on unestablished vendors found via quick online searches brings inherent risks when urgent issues arise. Unlike seasoned companies with specialized teams available around the clock, random independents often prove frustratingly inconsistent or entirely unreliable. Finding yourself stranded compounds distress during emergencies.
Most investors also lack the operational experience, compliance knowledge, and risk management skills to efficiently oversee critical aspects like marketing, applicant screening, rent collection, documentation, preventative maintenance, record keeping, resident relations, and emergency response. Learning these competencies on the fly while managing a spiraling crisis usually leads to expensive and stressful trials by fire. Mitigating such hazards requires engaging competent specialists from day one.
However, perhaps the biggest drawback of DIY is that it forfeits game-changing economies of scale.
“Without dedicated staff servicing hundreds of similar properties, self-managing owners spend substantially more time on every recurring task than institutional companies with extensive automation built to support massive portfolios,” Clothier explained. “It becomes challenging giving assets adequate individual attention when wearing so many operational hats.”
The Done-For-You Management Alternative
Professional property management companies like REI Nation offer turnkey, hands-off solutions customized to maximize returns for real estate investors. By leveraging experienced teams, refined systems, and specialized technology, these firms can optimize operations and oversight across assets spanning vacant land to 200+ unit apartment complexes.
Rather than self-coordinate repairs, screen applicants, adjust leases, oversee contractors, handle communications, track payments, and document everything for properties in multiple states, clients can transfer those administrative and managerial burdens to dedicated experts. These specialists focus solely on excelling across a spectrum of operational areas that investors attempting to self-manage find difficult to execute smoothly, especially from afar.
Working with established vendors also helps mitigate risks should urgent issues arise on nights, weekends, or holidays. Their depth of experience in resolving common emergencies and coordinating after-hours work prevents small problems from cascading into major headaches. Investors sleep better knowing seasoned teams monitor their assets around the clock.
Additionally, centralized record management systems give clients 24/7 access to critical documentation like budgets, maintenance logs, showing reports, applicant details, and performance metrics, on demand. Built-in auditing and rigorous quality assurance workflows add accountability as staff activities remain visible, rather than occurring behind closed doors.
Perhaps most importantly, by amassing large portfolios spanning thousands of units, these firms do achieve economies of scale, allowing them to systematically enhance procedural efficiency over decades in business. Much like asset managers drive higher returns through greater cumulative capital, property managers with extensive holdings refine increasingly-productive systems. Investors reap the rewards frictionlessly.
Partnering with an established done-for-you property management firm lets real estate investors simply collect passive income checks instead of sweating minutiae. Those attempting to self-manage often learn the hard way how quickly oversight demands devour free time. By paying experienced pros, owners regain the freedom to focus on the things they enjoy.
“The DIY path invariably leads new investors toward disappointment once they experience the demands firsthand,” concluded Clothier. “By trusting proven pros, REI Nation eliminates the pitfalls so our clients can simply sit back, collecting returns.”
About REI Nation
REI Nation, led by CEO Kent Clothier Sr., is a professional property management company that offers turnkey, hands-off solutions to maximize returns for real estate investors by leveraging experienced teams, refined systems, and specialized technology. The firm manages over 7,400 properties serving more than 3,414 property owners and oversees $1.45B in residential rental property assets. Find out more about their done-for-you property management options here.
Realty Times | Mar 14, 2024
