Many landlords purchase real estate properties in areas they don’t even live in, and that’s because there are plenty of prime locations with high rental demand. This is actually a pretty common practice among property owners, but like other ventures, there are risks you have to consider first.

Key Highlights:

Limited oversight makes it harder to monitor your property and connect with tenants. Being present helps enforce rules and build trust.
Slow response times are common when you're managing remotely. This can lead to unhappy tenants and unresolved issues.
Travel costs add up when visiting your out-of-state property. Hiring a local manager can help, but it comes with its own costs.
Communication can break down due to time zones, third parties, or vendor delays. Tenants may feel ignored if you're hard to reach.
You may miss local market changes like rent trends or new laws. Local landlords often have the advantage here.

1. Restricted Oversight

Nothing beats being a present landlord since you can check on your tenants in person. It will be harder to monitor the condition of your rental business and your tenants when you’re away, and you can be unintentionally negligent.

Even the mere presence of the landlord can change the overall living environment of a rental property.

Tenants generally appreciate a responsive and communicative landlord more. Plus, being there in person makes it easier for you to establish landlord-tenant relationships, encouraging them to follow your lease rules and take care of your property.

2. Delayed Responses

It’s almost inevitable for issues to arise, no matter how vigilant you may be with property management, and that’s for local landlords.

With the distance and your reliance on virtual communication channels, you may be slow to respond to emergency repairs or other tenant issues. Without prompt resolving, it can take a significant toll on tenant satisfaction.

You can use property management software to create automated maintenance scheduling, but there’s only so much technology can help with, even with pre-written responses to basic inquiries.

3. Travel Expenses

You may be able to manage your rental property as an out-of-state landlord, but you are still expected to visit it from time to time to ensure that operations are smooth and efficient. Those are additional expenses, not to mention more time spent traveling when you could’ve been doing something more productive.

You can avoid traveling by appointing an employee on-site, or a property manager who can oversee your rental business. While you are simply exchanging one expense for another, you won’t have to travel as much and can rely on professional property management.

4. Communication Barriers

Living in a different state or country can lead to time zone differences, unreliable third parties, misunderstandings, and complications with vendors.

When your tenants have a difficult time reaching you, it can be mistaken for inattentive property management, which could lead to them not renewing their leases.

If you take the time to respond to messages and requests, this can be completely avoided. However, if you have several investment properties, communicating with tenants will easily become an overwhelming task for just one person.

5. Outdated Local Market Knowledge

You usually learn about key trends through the local news or fellow landlords in the area, which means that being an out-of-state landlord places you out of the loop. By missing crucial factors, you cannot make informed decisions regarding rent price, marketing strategies, or new rental laws.

Also avoidable if you do your due diligence, but it’s more convenient to receive the news as soon as it emerges. Your competition with an on-site landlord or property manager will have an advantage over you in this aspect, even with regular market research.

What Should I Do as an Out-of-State Landlord?

Hire a Trusted Employee

If you have someone you trust to oversee your rental property, you can hire them to do your property management duties for you. They can simply be the middleman who relays news or concerns so you can take action remotely.

Of course, some property owners don’t trust others to manage their property due to the lack of expertise and personal stake, but it may be necessary to maintain effective communication and prompt response to issues.

Hire a Property Manager

Hiring a professional property management company is perhaps the most viable option if you want to be an out-of-state landlord. It’s a typical move for real estate investors who have several properties across the country.

A professional property manager will have the experience and real estate knowledge you’ll need to successfully manage your property. Companies like CRM Properties offer comprehensive property management services that cover every aspect needed for a successful rental business.

Out-of-State Landlord FAQs

Can I own rental property in a state I don’t live in?

Yes, there’s no law preventing you from owning out-of-state rental property. However, some states may require you to appoint a local agent or property manager.

What legal responsibilities do I still have as an out-of-state landlord?

You're still responsible for following all landlord-tenant laws, handling maintenance, and responding to tenant issues promptly—regardless of where you live.

Can I be sued if I manage poorly from out of state?

Yes. Negligence in property upkeep, poor communication, or ignoring tenant concerns can result in legal action.

What if there’s an emergency at the property?

Have a 24/7 emergency contact in place—ideally a property manager or maintenance company with authority to act.

Are there tax benefits to owning rental property out of state?

Yes. You can deduct mortgage interest, repairs, travel expenses, depreciation, and property management fees.

Can I evict someone while out of state?

Yes, but you’ll likely need to hire an attorney or local property manager to handle court filings and attend hearings.

Should Out-of-State Landlords Hire Property Managers?

Whether you consult real estate professionals or local landlords, the general answer would be: Yes. Your absence can impede your ability to manage your rental property effectively, which will only hurt your business in the long run.

Hiring property managers like CRM Properties helps you own Indianapolis rental properties without shouldering the stress of being a landlord. Our core objective is for you to build wealth and save time, as well as eliminate stress.

Let’s discuss how we can help you. Contact us today!