How can I manage
my real estate investments from overseas?
Should I let
my family or a friend
manage my real estate investments?
answers, three words: You can't. Don't.
Unless you want a tenant calling you at 2AM to tell you
the toilet is clogged, don't try to manage your property
Unless you really want to stress your relationships and
perhaps permanently damage them, don't have family or
friends manage your property for you.
Hire a Professional
Hire a professional manager. It's what they do. They
know all the legal ins and outs, have reliable repair
staff, and can even evict someone if it needs to be
done. Of course, you can save 10-11% of the gross rents
by having family or friends manage it, but why would
they want YOUR headaches? And will they be quite as
diligent as a rental agent who wants to get the property
rented quickly - so they can collect their commission?
the way, management contracts have clauses built into
them so that the agent must ask your permission before
spending certain amounts of money. You set the limit.
Property Management can be Dangerous
will you feel if your father is beaten up when he goes
to collect the rent?
about the lawsuit he causes when he doesn't follow the
legal process for evicting someone who hasn't paid your
rent for the last three months?
That happens too.
about when he forgets to renew the fire insurance a
month before the house burns to the ground? Yep,
that happens too.
the pros handle it! They have errors and omissions
insurance to handle all these problems. They know how
to do it right. It's what they do.
it all good?
Have I ever had to fire a property manager? Yes. Twice
in about 16 years - but that is three managers for three
different properties across most of that time. And, it
is not so difficult to fire them - their contracts
usually have a thirty day notice built into them. I did
it from overseas both times. Not a problem.
will you feel if you need to "fire" your father, or best
How will they feel?
Special note: I had a major fire in one of my rental
properties a few years ago. Damage well in excess
of US$20,000. My property manager handled it all.
It would have been a major task for a family member or
friend to obtain bids, hire contractors, supervise their
work - and coordinate all the payments with the
insurance company. You would need to quit your job
and go home to take care of your investment.
BTW, if you buy good landlord insurance - it covers the
lost rent during the time the building is not habitable
- you need not lose any income in such a circumstance.
you invest - do it right. Having family or friends
manage your investments is not an adult way of managing
Caveat: These are only my opinions, I am not a