Learning how to manage a rental property from out of state is one of the most valuable skills for real estate investors seeking better cash flow and returns. To help you navigate the nuances of long-distance property management, we’ve outlined how to find and vet qualified property managers, your role as a passive investor, tips for maintaining your out-of-state rental property, and how to set realistic expectations for your property management team.

Many successful real estate investors reside in high-cost markets, such as San Francisco, Los Angeles, or Seattle, but invest in more affordable markets with better cash flow potential. With some research and diligence, you can find some of the best places to buy rental properties. Investing in more growth-oriented markets can yield significant returns.

Out-of-state investing offers several key advantages:

• Better affordability and cash flow in markets where home prices are 3 to 4 times the average income (compared to 10+ times in expensive coastal cities). Before selecting a market, learn how to do a real estate market analysis to ensure you’re investing in areas with strong fundamentals and growth potential.
• Higher return on investment (ROI) opportunities by focusing on undervalued markets with population growth and job expansion.
• Diversifying a portfolio across different markets lowers risk from local economic downturns.
• Access to landlord-friendly states with more balanced tenant-landlord laws.

The challenge? You can’t physically manage properties that are hundreds or thousands of miles away. That’s where professional property management becomes essential.

Many investors quickly realize that managing a rental property out of state without professional help is not a viable option, as it quickly becomes a full-time job. If you decide to self-manage, you’ll need to be able to handle emergencies and maintenance issues, understand and comply with local landlord-tenant laws, manage contractors and verify quality work, screen tenants and run credit and background checks, plus conduct regular property inspections.

If you can’t answer “yes” to all these responsibilities—and handle them from hundreds of miles away—hiring a professional property manager is your best solution. Even investors who live near their properties often choose professional management because of the time commitment and specialized knowledge required.

To learn more, watch 5 Tips on How to Manage Out-of-State Rental Property.

When learning how to manage a rental property from out of state, a key component is selecting the right property management company. For a deeper dive into what makes property management successful, read our complete guide on why property management is important.

Here are the critical factors to evaluate:

Companies that manage hundreds or thousands of rental units should have proven systems in place that streamline the processes and communication for tenants and investor owners. They should also understand local laws and be able to show how they handle issues efficiently and effectively. For example, experienced managers will have extensive expertise in tenant relations, maintenance, and local regulations.

A company that focuses on Class A properties might not have the right systems for Class C properties, and vice versa. Tenant expectations and management styles vary a lot.

Since property management regulations vary by state and county, it is critical to work with a company that understands local landlord-tenant laws, eviction procedures, and fair housing requirements. Working with a savvy, local team helps protect you from costly legal mistakes.

Thorough tenant screening is your first line of defense against problem tenants. Quality property managers should use online application systems with third-party background checks, review credit reports and income verification (typically through paystubs) along with identity verification, check for automatic disqualifiers like felony convictions, previous evictions, or large unpaid collections, contact not just current landlords (who may want problem tenants gone) but also past landlords for honest references, and verify payment history, property condition at move-out, and whether they’d rent to the applicant again.

The screening process typically takes several days and is one of the most important services your property manager provides.

Understand exactly how the property manager charges for their services. Monthly management fees typically run 8-10% of the monthly rent. Leasing or placement fees often equal one month’s rent for placing a new tenant (some companies include the first tenant placement in the purchase price).

None of these fee structures is inherently bad—what matters is transparency. A company with a lower monthly fee might charge more for other services, so calculate the total cost of management over time.

Professional property managers should use dedicated software platforms. These systems provide online owner portals where you can access reports and statements, receive 24/7 automated notifications about maintenance issues, tenant payments, and lease renewals, facilitate rent payments, digital rent collection, and maintenance, plus transparent record-keeping.

If a company doesn’t use professional software, that’s a red flag. Across the board, modern technology has made it easier for investors to monitor their investment properties remotely. Learn more about property management tips and tools that help landlords succeed.

Regular inspections (typically annually) are crucial for out-of-state investors. Property managers should conduct walkthroughs to check for unreported maintenance issues, such as leaky faucets, verify that the property is being properly maintained, identify problems before they become expensive repairs, and document the property’s condition.

Keep in mind that some tenants hesitate to report issues on time because they worry about being labeled as “problem tenants.” Regular inspections with the property management team can help identify these issues early.

For investors managing rental property from out of state, good communication is everything. Many investors prefer to work with companies that have a dedicated owner liaison, as it can streamline communication and services. Your point of contact should respond to emails and calls within 24 to 48 hours during business hours. They should also send regular financial statements and property updates, and provide clear procedures for escalating issues when they arise.

Some companies have specific owner concierge teams that handle all owner communications separately from tenant communications.

While professional property management handles day-to-day operations, you still have responsibilities.

For comprehensive guidance, see our complete property management how-to guide.

Plan to spend 15-20 minutes each month reviewing monthly financial statements, maintenance notifications and approvals, lease renewal recommendations, and rental rate adjustment proposals.

Most property managers have a 60-day lookback policy for disputing charges or catching errors, so timely review is essential.

As the property owner, it is up to you to make prompt decisions about lease renewals and rent increases. A good property manager will typically provide recommendations weeks in advance. If you don’t respond within the timeframe they specify (often 2-3 weeks), they’ll usually proceed with their recommendations.

Another thing is approving major maintenance and repairs. While managers handle routine maintenance, major expenses (like roof replacements or HVAC systems) require your approval. In addition, if a tenant falls behind on rent, the manager may request your approval for payment arrangements.

Out-of-state investors should maintain adequate reserves. For your first five properties, we recommend reserves of $5,000 per property. For additional properties, plan on $3,000 per property.

Having reserves ensures maintenance issues don’t affect your personal finances. With material cost increases and some lingering supply shortages, plan for 1.5-2 months’ rent for typical turnover costs.

Maintain your original home inspection report and property records. When a major system needs replacement (like a water heater after 5 years), referring to your inspection report will show that it was already 10-15 years old at the time of purchase, and that the replacement was predictable and should have been budgeted for.

Understanding how to manage a rental property out of state includes knowing how your property manager finds and screens tenants. Professional tenant placement is one of the most valuable services property managers provide. Here’s how the process typically works:

Quality property managers invest in professional marketing. They take professional photographs of the property, list on multiple rental websites (both free and paid services), utilize MLS listings and platforms like Zillow, and create attractive property descriptions that highlight amenities and location. Strong markets can may generate over 100+ leads per day for high-quality properties.

The manager handles inquiries, initial phone screenings, scheduling, and conducting property showings, and pre-qualifying applicants before they submit formal applications.

Qualified applicants complete a comprehensive online application that includes a full background check through third-party services, credit report review, income verification (typically through pay stubs), civil case history (including lawsuits), criminal history check, eviction history search, and collection account review (especially utility company collections).

Property managers contact past landlords (not just current ones, since current landlords may want problem tenants gone), review payment history, property care, and whether they’d rent to the applicant again, and verify proper notice given when moving out.

Professional property managers maintain strict adherence to fair housing laws. They use identical screening criteria for all applicants, don’t allow owners to choose between qualified applicants (this prevents discrimination liability), make all acceptance/rejection decisions based on objective criteria, and keep owners informed but protect them from fair housing violations.

This is a critical reason to use professional management—fair housing violations can result in lawsuits, and tenants have access to free legal representation through fair housing organizations.

The complete screening and placement process typically takes several days to complete thoroughly. Rushing this process increases the risk of placing problem tenants.

A critical part of managing out-of-state rental property is coordinating maintenance and repairs from a distance. Here’s what you need to know:

Maintenance is necessary. Your property manager should quickly address repairs, especially emergencies (AC, heat). They should work with reliable contractors who offer fair rates. They also need to inform you about issues and estimated costs, and gather multiple quotes for major repairs when needed.

Many established property management companies warehouse common replacement items (water heaters, furnaces, flooring) and work with contractors on fixed pricing, providing cost savings you couldn’t get on your own.

While you’re entitled to second opinions on major repairs, consider that property managers typically get the best local pricing through established contractor relationships. If you find a significantly cheaper quote from out of state, there’s likely a reason (scope differences, quality concerns, warranty issues). Your property manager’s local expertise is valuable—use it.

It’s a good idea to budget for 1.5 to 2 months’ rent due to material costs and supply chain issues. Plan for these costs in your reserves. Regular property maintenance during tenancy helps minimize turnover expenses.

Carry comprehensive landlord insurance that includes property damage coverage, liability protection, and loss of rent coverage (so you receive rental income while repairs are made). Proper insurance can save you from catastrophic losses.

Professional property managers handle evictions without requiring you to be present. While the eviction process is similar across the U.S., the laws and timelines vary by state. Be sure you understand what your property management team will handle, such as filings, court appearances, and legal proceedings.

Property managers have emergency protocols in place for issues such as HVAC failures, plumbing emergencies, electrical problems, and weather-related damage. They’ll coordinate repairs immediately and notify you of the situation and costs.

For insurance claims, the property manager can help schedule adjusters and provide property access, coordinate estimates, and oversee repair work. However, as the owner, you will need to sign claim documents and authorize the insurance company to proceed.

Successfully managing rental property out of state requires understanding what’s realistic and what’s not. Here are key mindset shifts every remote investor needs:

Tenants may prioritize expenses differently than you would. Some will buy a new car before paying rent. Others face legitimate hardships—job loss, family emergencies, or unexpected expenses. Your property manager will work with tenants when possible, as turnover costs more than working out payment arrangements with otherwise good tenants.

Properties require ongoing investment to remain habitable and attractive to quality tenants. Budget for routine maintenance, system replacements (HVAC, water heaters, and appliances have limited lifespans), unexpected repairs, and turnover costs.

These aren’t failures—they’re normal costs of property ownership.

Learn more about five types of real estate investing risks, so you can build contingency plans and protect your investment from a distance.

Mistakes happen occasionally. When they do, professional property management companies will own the error, make it right, learn from the experience, and improve systems to prevent recurrence.

Choose companies with strong track records and transparent communication.

The most successful out-of-state investor relationships are built on kindness (property management is challenging work, and treating your manager with respect yields better service), responsiveness (reply to time-sensitive communications promptly), trust (you hired the property manager for their expertise—listen to their recommendations), and realistic expectations (understand what property managers can and cannot control).

Make it a habit to review financial documents monthly or at least quarterly. Taking the time to review statements helps you catch errors while they’re fresh, understand your property’s performance, track expenses for tax purposes, and stay informed about your investment.

To help you with the vetting process, here are some questions to get you started:

1. How long have you been in business, and how many properties do you manage?
2. What types of properties (single family, multi-family, new construction) and neighborhoods (A, B, C, D) do you specialize in? Do you also invest in these areas?
3. Are you properly licensed in this state/county?
4. What is your tenant screening process?
5. What property management software do you use?
6. What is your complete fee structure (monthly, placement, maintenance, renewals)?
7. How often do you conduct property inspections? What are the fees for this service?
8. Do you offer any warranties (eviction warranty, placement warranty)?
9. How do you handle maintenance emergencies?
10. Who will be my primary point of contact? What is the response timeframe?
11. How quickly do you typically place new tenants?
12. What is your average vacancy rate?
13. Can you provide references from other out-of-state investors?

At RealWealth, we specialize in helping investors buy out-of-state rental properties in top U.S. markets, with property management in place.

When you become a member, you gain access to:

• Vetted property teams with proven track records who sell turnkey properties with professional property management already in place.
• Educational resources, including webinars, articles, and investor guides.
• Live events and property tours to connect with property teams and like-minded investors.
• Investment counselors who can help you evaluate markets and connect with the right teams, and provide ongoing support even after you purchase.

Managing rental properties out of state becomes significantly easier when you work with experienced teams who understand the unique challenges of long-distance investing. Our property teams have systems in place specifically designed for remote investors, from digital reporting to proactive communication.