We have 9 homes, 3 of them are multy family for a total of 14 rental units. We may have to relocate within the next year. Now we are wondering what to do with the rentals.
Should we consider selling them during the year land taking a capital gains hit, keep them and find a propery manager if we move away, start finding rent to own type deals… any thoughts on this type of situation. How many of you are long distance landlords?? Any advice?? Is it worth it to start over again in a new location knowing that the nature of my husbands job may have us moving around every few years??? I would love to hear any advice you might have.
Can you use 1031 exchange to help you out? Then you could get rentals in your new area. I guess it depends on the market and how quickly you could sell them and if it’s for the price you want too.
My philosophy is that it is not about the money it is about the lifestyle. You husband is moving you around for money. The reason I am doing real estate is not because I want to earn the most money that I can. I can find a job to do that. I am in a great place and when my boss comes to me and says that she wants me to move to Wisconsin, I will tell her to pound sand. That is because I have enough real estate to pay my living expenses. I wouldn’t put roots down very deep unless I was in a place that I wanted to stay. And I would tell my husband to stop trading time for money and start spending his time doing what he loves doing.
I thought about the 1031 exchange, but without knowing where we might end up and what the market there would be like I’m not sure I want that as my backup plan. I’m not rushing into anything right now, but just trying to get some idea from others what they might do in a similar situation.
It seems like most on here are local landlords and I don’t really have a feel for what it would be like to have to trust a property manager. Maybe if I had a bit more info from this perspective I would feel more comfortable keeping what we have for the long term.
Thanks for the thoughts bluemoon. I understand your reasons are why most people get into real estate. That wasn’t really our motivation. We just wanted a good place to invest that would have a nice return when we are ready to retire. We bought most of our places with no money down, so we didn’t have to put out much cash other than a bit of clean up and a for rent add. We put them on the bi-weekly payment plan to pay them off a few years early. Our thought is that in 15-20 years they will be fully paid and we will be generating a nice monthly income for retirement. My husband really enjoys what he does… He thrives on it. We will make every effort to stay where we are, but if the right thing comes along in another location that we would enjoy we will go.
I guess with that info in mind does anyone have experience with property managers or anything else that may help me out with my backup plan? I really would hate to have to sell them.
I currently operate 29 units among 4 property managers in 2 states. Some of the properties are kind of close to my house and do some the maintenance work and renovation myself, but rely on property managers to select tenants, pay bills, etc. Yes, it does take a certain type of trust, but you need to find someone you can meet your needs and understand your style in terms of how to handle repairs, select tenants, etc. Finding the right person/company can be a bit of work. I think the key is to find someone is an open communicator and ready available and willing to discuss issues/inform yuou of issues as they arise. A good example is I have one property manager who refuses to use email and seems to always unavailable by phone and full excuses why units are not rented. I will be terminating my business relationship with him quite shortly. Like any business relationship, it can run the whole sprectrum. Personally, I’ve had my best experience with smaller firms (usually real estate office) that are focussed on individual owners and properties (not doing huge complexes). However, watch out for real estate agents pretending to be property managers. If a real estate office is doing rentals also, they should really have someone focussed on that activity.
It sounds to me like selling and setup shop ni another place is not a great idea becuase you already know you will move again. Moreover, getting new properties vs keeping the old ones as you already know the mainteance issues, how well they show to potential renters, etc. Also, if you don’t have a large amt of equity, a 1031 exchange is a lot of hassle for very small gain.
I would keep the properties and find management. If the properties can produce positive cash flow with a manager in place and you dont have a better deal to put the proceeds of the sale into why not just sit on a performing asset. I look at real estate to keep not to sell. If you can make your properties as passive in nature as possible, life only gets one step easier. I consider myself a lazy person and if I can pay some one to manage something for me and it can still make me my desired return and wouldnt think twice. If you are really considering selling and are willing to cary a note at !00% LTV please dont hesitate to let me know! I would love to take your problem from you if it makes me money!
You could place an add in your local paper for a management position. Interview a few people and do all the research you would normally do with hiring a person. You should define what you want them to do in detail so there are no misunderstanding in what is expected, or just higher a local property management company that may charge more but provide better services.