# Experience Managing Remote Properties



## tomsun (Jul 10, 2019)

Hi all. I currently live in Toronto and I'm in the market for a rental property. However looking at the Toronto market, it's hard to find cash flow neutral rental units, let along a cash flow positive one. 

There has been talk about how London Ontario is great market. However because it's a 3 hour drive, I'm wondering if anyone else has similar experience in finding and managing a unit that's that far away, and do you find it manageable? Since as an investor, I'm at a disadvantage not only in my understanding of the city, but any hands on management will require a drive down, or delegate to a property manager. 

Any information is appreciated. Thanks.


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## Just a Guy (Mar 27, 2012)

There are various levels of difficulty in being a landlord. The easiest one is to work in your hometown, or something close by. Going to a remote city is another step up as you then need to develop a network of contractors, managers, etc. Next would be interprovincial and then across canada. 

I’d never recommend starting at step two, because you need to develop experience. If the opportunity doesn’t exist in your own town, real estate may not be a good investment for you. You really need to know the areas and how a town or city functions to make proper decisions. You can’t usually just jump in and everything goes well, especially with the first few units.


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## Just a Guy (Mar 27, 2012)

There are various levels of difficulty in being a landlord. The easiest one is to work in your hometown, or something close by. Going to a remote city is another step up as you then need to develop a network of contractors, managers, etc. Next would be interprovincial and then across canada. Each one is harder and more complicated to do. Plus you have to find people you can trust, which is extremely hard in this industry. 

I’d never recommend starting at step two, because you need to develop experience. If the opportunity doesn’t exist in your own town, real estate may not be a good investment for you. You really need to know the areas and how a town or city functions to make proper decisions. You can’t usually just jump in and everything goes well, especially with the first few units.


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## sags (May 15, 2010)

I can tell you what your competition would be and you can judge from there.........today's purchase prices versus renting.

As London has 2 major schools (Western University and Fanshawe College) and 2 huge teaching hospitals.......a lot of purpose rentals were built over the decades.

There are several family business landlords who own thousands of units.......apartments and townhouses, that they built in the 1960s and 1970s for much less than today's prices.

As such.........they would be the main competition because they can easily make a profit for the capital they spent 50 years ago to build the units.

We rent a 3 bed 3 bath all brick townhouse in a nice area. Unfinished basement and mature trees all around with a park behind us.

Our rent is $1100 a month plus hydro. The landlord pays for everything else, including all inside and outside maintenance (landscaping, snow removal). 

They have a large maintenance staff and a lot of equipment and look after the maintenance of the entire subdivision area and it is spotless.

Our rent also includes a free membership to a private club that has a full gym, indoor pool and outside pool area that is like a resort. There is even a water spray area for kids and they sponsor a couple of events a year for the kids. They also provide subsidized swim lessons and there are also play parks for the kids.

I mention all that so you have a clear understanding of what your competition would be like in London.


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## sags (May 15, 2010)

Having said the above, it is possible to buy townhouse units close to the schools and rent them to students.

The biggest problem with that is that students share the space and there is often damage that gets done which they all deny being responsible for.

A few years ago, when I delivered into a "student area" of brand new homes, it looked like a war zone.

Community college kids are the worst tenants. If you want student rentals I would suggest somewhere near the university where there is also a world class teaching hospital.

Those students take their education a lot more seriously from my experience of operating a delivery company for a couple of years.


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## OnlyMyOpinion (Sep 1, 2013)

Sags, would someone new also pay $1100/mo or would they pay more? I.e., I'm wondering if you are benefiting from being a long time, reliable tenant.


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## sags (May 15, 2010)

We benefit somewhat due to rent controls in Ontario. A new tenant would pay several hundred dollars a month more to live here.

There are places with higher rents, but they have fully finished basements, central air, dishwashers, underground parking etc. 

There may be good opportunities with the right unit, but I have found when the price looks attractive there is usually a reason......like high condo fees or a high special assessment.

As always due diligence is required and I sure wouldn't want to rent to students from a distance.

I remember years ago a buddy of mine inherited a nice home near the University. He decided he wanted to sell it and offered us a good deal.

We arranged to meet him at the house and he was standing on the sidewalk with his mouth hanging open. He had never seen the house before.

The students completely destroyed it. The yard was nothing but weeds and garbage. Inside garbage was piled up and there were holes all over. The carpet was filthy.

We politely declined to buy the place while he had the students evicted. The students were to blame but so was the landlord who didn't watch her investment.

No.......I wouldn't rent to students unless I could keep a close eye on them.


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## sags (May 15, 2010)

It seems to me that the situation in London has been greatly affected by the proximity to Toronto and the rising home prices there.

The same thing is happening anywhere near Toronto.

After decades of level home prices, people started selling their homes in Toronto for big money, moving to London and commuting to TO everyday.

Sell their home for $800,000 and buy a much nicer home here for $300,000. As TO values went up......the people bid more on homes here.

Today those same houses are listed for over $500,000 and are well beyond the reach of average people in London.

Meanwhile, rents didn't keep up because the market wouldn't support continuing higher rents here and rental units were probably overbuilt for decades.

So today.........a potential landlord may find it difficult to match the home price with the rent.

All the builders in London today are building high end luxury apartments. Very few are for sale. Most are rentals and people are filling them up.

Just the way our local real estate market is.........with Toronto a long, long commute away that people are willing to make.


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## sags (May 15, 2010)

A final thought on the local real estate scene.

The media says home prices are falling, but when I go on the local Reddit website people are saying they are bidding on homes and not getting them.

They say that "asking price" is meaningless. It appears that people are still moving here from Toronto and bidding up home prices.

So, I wouldn't accept the MLS asking prices as the gospel. The property may sell for much more than that, which makes it even more difficult for landlords to calculate everything.


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## Longtimeago (Aug 8, 2018)

tomsun said:


> Hi all. I currently live in Toronto and I'm in the market for a rental property. However looking at the Toronto market, it's hard to find cash flow neutral rental units, let along a cash flow positive one.
> 
> There has been talk about how London Ontario is great market. However because it's a 3 hour drive, I'm wondering if anyone else has similar experience in finding and managing a unit that's that far away, and do you find it manageable? Since as an investor, I'm at a disadvantage not only in my understanding of the city, but any hands on management will require a drive down, or delegate to a property manager.
> 
> Any information is appreciated. Thanks.


I'd go with Just a Guy's thoughts and accept Sags knowledge of the London market. But I don't see anything in your OP that says whether this is your first ever rental property or how much experience you have as a landlord. That would influence any advice obviously.


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## AlexReal (Sep 2, 2019)

Owning a rental property will require much effort, proper management and maintenance make a successful rental property. If you are living far from your property location then this will be a hard time. 

It takes time to get people to rent a property. There will be inquiries, open-houses, budget discussions, and other renter concerns. It these would require you to drive in and out, then managing the property won't be easy. 

Property investment is a great opportunity for an income source if everything is in place. Done wrong, it may do more harm than good.

Look for places in the city where property rentals are a thing. Short-term renters are also good because you can have more flexible pricing, as long as they can easily be replaced. 

Look into your network, or find property managers in the area to help you while you are away.


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## Beaver101 (Nov 14, 2011)

^


> ... Look for places in the city where property rentals are a thing. *Short-term renters are also good because you can have more flexible pricing, as long as they can easily be replaced. *
> 
> Look into your network, or find property managers in the area to help you while you are away.


 ... would that be good in the city of London that the OP is enquiring about? If so, I don't suppose he/she go the DIY route. Ie. a property manager is a must, right?


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## Newby1983 (Apr 9, 2015)

Finding a reliable property manager should be your first step if you plan on buying a multi unit. If buying a single family home you need to build a network of contractors. This is all important before making an offer.


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## Just a Guy (Mar 27, 2012)

Newby1983 said:


> Finding a reliable property manager should be your first step if you plan on buying a multi unit. If buying a single family home you need to build a network of contractors. This is all important before making an offer.


You can always find a tenant with property manger experience, I’ve had this before, they get a break on rent, but manage your properties for you. Place an add on Kijiji, offering the option. Professional managers are more prone to corruption I’ve found.


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## GalacticPineapple (Feb 28, 2013)

What is the argument for owning individual properties versus just owning REITs?


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## Just a Guy (Mar 27, 2012)

Roi is much, much higher, less chance of fraud.


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## Longtimeago (Aug 8, 2018)

GalacticPineapple said:


> What is the argument for owning individual properties versus just owning REITs?


As Just a Guy says, higher return. Where most people get hung up is on the 'I don't want to be a landlord' issue. They always think owning a property directly means a house and all the hassle of landlording. I had money directly in properties for years and was never a landlord. Commercial and industrial properties with a group of owners each holding a percentage and all landlording done by professional property management companies. Investing directly in real estate does NOT just mean buying a house and renting it out. Some people just can't seem to understand that.


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## Beaver101 (Nov 14, 2011)

Just a Guy said:


> Roi is much, much higher, less chance of fraud.


 .... have to ask, how much higher and over what period of time? As with the less chance of fraud - what about mortgage frauds versus frauds perpetuated by investing in REITS?


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## Beaver101 (Nov 14, 2011)

Longtimeago said:


> As Just a Guy says, higher return. Where most people get hung up is on the 'I don't want to be a landlord' issue. They always think owning a property directly means a house and all the hassle of landlording. I had money directly in properties for years and was never a landlord. *Commercial and industrial properties with a group of owners each holding a percentage and all landlording done by professional property management companies. * Investing directly in real estate does NOT just mean buying a house and renting it out. Some people just can't seem to understand that.


 ... well, it's ALOT cheaper to buy BAM.A than to put in half a million bucks (on the cheap side) for being "part" owner of a commercial property.


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## sags (May 15, 2010)

Longtimeago said:


> As Just a Guy says, higher return. Where most people get hung up is on the 'I don't want to be a landlord' issue. They always think owning a property directly means a house and all the hassle of landlording. I had money directly in properties for years and was never a landlord. *Commercial and industrial properties with a group of owners each holding a percentage and all landlording done by professional property management companies.* Investing directly in real estate does NOT just mean buying a house and renting it out. Some people just can't seem to understand that.


Pretty much the description of a REIT.


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## Just a Guy (Mar 27, 2012)

Beaver101 said:


> .... have to ask, how much higher and over what period of time? As with the less chance of fraud - what about mortgage frauds versus frauds perpetuated by investing in REITS?


I get infinite roi on my investments because I have no money of my own in it. As for mortgage fraud, I’d have to be the one committing it, unlike trusting others not to commit fraud, watch shows like American greed, probably half the shows are about real estate fraud because it’s so easy to do and there’s a lot of money to be made. Double digit returns are fairly common and easy to achieve right out of the gate. Why settle for the single digit returns do reits? I’ve got a system in place where I don’t do much actual work anymore.


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## Beaver101 (Nov 14, 2011)

Just a Guy said:


> I get infinite roi on my investments because I have no money of my own in it.


 ... isn't this saying you're fully leverage (and possibly some more) or playing with a house of cards?



> As for mortgage fraud, I’d have to be the one committing it, unlike trusting others not to commit fraud, watch shows like American greed, probably half the shows are about real estate fraud because it’s so easy to do and there’s a lot of money to be made.


 ... I don't think mortgage fraud is isolated to the USA. In fact, I read (sometime ago), with the frothy RE market we have here, Canada is a hotbed for mortgage fraud though not as easy.



> Double digit returns are fairly common and easy to achieve right out of the gate. Why settle for the single digit returns do reits?


 ... why settle for more risk than you can take? 



> I’ve got a system in place where I don’t do much actual work anymore.


 ... I think you're one of the exceptions and you didn't get your system in place overnight either. Based on your experience, how long do you think investors nowadays would be willing to hold onto their RE holdings in order to achieve the double-digits? I bet not as long as you have.


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## Myrsa (Apr 23, 2020)

If you are having multiple properties and want to manage them remotely then there are many property management software available nowadays


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## Just a Guy (Mar 27, 2012)

Beaver101 said:


> ... isn't this saying you're fully leverage (and possibly some more) or playing with a house of cards?


there is difference between being fully financed and fully leveraged. To be fully financed I have to have at least 20% equity to finance the property. Not really a house of cards if it can cash flow in a down economy. my average Purchase price is less than 50k/door my aver rent is over 1000/door it’s a cash cow. I recently turned down a nice 3 bedroom place. They were asking 77k, but i only wanted to pay 70k. Each month the tenant pays me, the principle goes down, the profits go up. As we enter the age of inflation, I’ll pay offf my properties with inflated dollars, so I’ll pay less, while my rents will adjust to inflation as well as the values. 



Beaver101 said:


> ... I don't think mortgage fraud is isolated to the USA. In fact, I read (sometime ago), with the frothy RE market we have here, Canada is a hotbed for mortgage fraud though not as easy.


you have to be willing to commit mortgage fraud, it’s a choice. One I choose not to do. It doesn’t matter which country you're in.



Beaver101 said:


> ... why settle for more risk than you can take?


huge returns, and I don't see much risk, but then again I’m doing it, I’m not an armchair expert



Beaver101 said:


> ... I think you're one of the exceptions and you didn't get your system in place overnight either. Based on your experience, how long do you think investors nowadays would be willing to hold onto their RE holdings in order to achieve the double-digits? I bet not as long as you have.


there are books out there who tell people how to emulate my system. I’ve talked about it before. Mr. Matt has videos on YouTube which also emulate my system. Duplicating what I do would take a couple of hours of reading. It‘s not rocket science. As for taking years to get double digit returns, I get them out of the gate as you could calculate from the numbers I said above. In fact, I don’t buy something that won’t make double digits right away, if not more.

just because you can’t do something, or are too afraid to, doesn’t mean it’s impossible or even hard.


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## Beaver101 (Nov 14, 2011)

Just a Guy said:


> there is difference between being fully financed and fully leveraged. To be fully financed I have to have at least 20% equity to finance the property. Not really a house of cards if it can cash flow in a down economy. my average Purchase price is less than 50k/door my aver rent is over 1000/door it’s a cash cow. I recently turned down a nice 3 bedroom place. They were asking 77k, but i only wanted to pay 70k. Each month the tenant pays me, the principle goes down, the profits go up. As we enter the age of inflation, I’ll pay offf my properties with inflated dollars, so I’ll pay less, while my rents will adjust to inflation as well as the values.
> 
> 
> 
> ...


 ... contradictory there ... there is a HUGE difference with "reading it" [or being that armchair expert as you noted] between "doing it". That's what I'm primarily getting at .. and with the "doing it", it could take decades (with abit of luck thrown in) to become successful. No overnight success or remotely "easy" unless you put on rose-coloured glasses.


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## Just a Guy (Mar 27, 2012)

True, you not only have to read it, but implement it...however between the simple solution book and the newer BRRRR book you have a step by step process to follow. It doesn’t take decades to learn. But then again, I’m sure you’ve read both books and managed to fail at it still just to prove your point. Actually I’m pretty sure you haven’t read either book And haven’t succeeded in implementing what they say, but are totally convinced it won’t work.

unlike you, I know people who have actually read the books, implemented what they read, and now own real estate that is quite profitable. The reason I recommend the books is so I don’t have to teach them personally..,as I’m often asked To do. I will help them out, but for the most part they don’t need much help after reading at least one of the books.


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