Do you own rental properties? (You should.)
I’m asked, from time to time, if it’s better to live near the properties that you plan to own for a long time, rental properties you plan to hold. Naturally, the “correct” answer is what is best for you – what fits your goals, preferences and needs. But I have a very definite answer for myself, so following is my preference and my reasons for it.
I own over 100 rentals and they’re all within a 20 minute drive of my home – probably 95 percent within 15 minutes. Why? Because I started out managing all of them myself, and I didn’t want to:
- learn more geographic areas than necessary – city ordinances, zoning changes, desirable areas, school districts, etc.
- spend excess time on the road for management, maintenance, showing the property, etc. I don’t make money sitting behind the wheel of a car.
And I’ve found over time that whenever there’s a real emergency, it’s definitely a plus to be nearby.
- We have lots of ice storms (they cause a lot of damage and power outages)
- I had one property fire
- Water leaks where the tenant can’t find the water shut-off valve (something you should always point out at move-in)
There are so many reasons I prefer to have properties nearby. Another major factor is being able to keep up with what’s going on in property locations:
- market values
- zoning changes
So, for me, close is a must for the properties I’m holding long term. If I purchase something farther away, I rehab and resell. My first rental property was 45 minutes from my home. 18 months later, I sold it. The drive made me crazy.
That being said, people from big cities, like Atlanta, think I’m crazy. They tell me they drive at least an hour to anywhere they want to be. My response is, that’s why I don’t live in Atlanta….
And, of course, many people prefer to own out of state or even out of country. I don’t know those areas, their laws, management companies, etc., so I have no interest. Doesn’t mean it wouldn’t be a good choice for others.
Another consideration is the population of your area. Our city is 250,000 so there are plenty of properties to own in a very concentrated area. Some parts of the country are far more rural and less densely populated requiring more drive-time in order to own a large portfolio.
Bottom line, you can make anything work. Find what you like, focus and become great at it.
I can assure you that owning rentals is the BEST way to create long-term wealth and you’ll find, over time, what locations and types of properties you prefer.
What do you own? Why?