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Having a property manager and a home warranty can alleviate a lot of the pain points of owning a place that's not local.
by jorts 11y ago
Having a property manager and a home warranty can alleviate a lot of the pain points of owning a place that's not local.
- wtvanhest 11y agoThat is a misconception. Once you do the math, a property manager is not economically feasible and a home warranty doesn't really help. Typical property management fees are 10% of gross where most properties net much less than 10% over the first 10 years of ownership in cash flow. A home warranty is usually only given for new homes as an incentive. New homes can appreciate, but if you are 'investing' you should be focused on buying at a good price, not buying at a retail price from a home builder. The home warranty second market (i.e. 3rd party home warranties) can reduce risk, but do not typically cover small repairs like a toilet not working etc. Those need to be done by the home owner, because if you hire someone every time it will cost you too much. Like I said, you will have a very, very bad time if you try to geographically diversify real estate holdings.
- prostoalex 11y agoGotta agree with @wtvanhest on this - I've been a passive real estate investor for more than a decade now and between scenario A, where several distinct properties are owned and managed through several property managers, and scenario B, where a single property manager takes over multiple properties, B would offer a consistent lead all else being equal. It's just easier to scale things such as service requests, day-to-day operations, a large manager would have a better time negotiating things like paint jobs or re-carpeting due to sheer volume.