Building Your US Property Team From Another Country

When I started buying US rental properties in 2016 I had a property manager and nobody else. That worked until it did not, which was the first time I needed somebody to tell me whether my manager was right.

That is what a team is for. Not to do more work, although that's part of it, but to give you a second opinion from thousands of miles away.

1. Who do you actually need, and when?

Six roles. Two on day one, two by the first repair, two by the first year end.

One note on the insurance agent, because it is the role owners most often let the seller fill for them. A seller's estimate is not a quote, and the gap between the two was $867 a year on one of the five properties I priced, which I set out in landlord insurance for foreign and out-of-state owners.

This is the operating team, once you own the house. Building the portfolio and choosing the market are a different job, and I have written that up separately in how I built an out-of-state rental portfolio. What follows assumes you already own something, or are about to.

2. What does the property manager not do?

More than people assume, and the gaps are where owners get hurt.

Your manager markets the property, screens applicants, signs the lease, collects rent, arranges repairs, inspects, and handles the end of a tenancy.

That is a full job and a good one is worth every dollar. I've said it many times: a good property manager can turn an average investment into consistent, low effort cash flow. Likewise, a bad manager can decimate your returns on an otherwise sound rental property. The standard I hold them to is in what good remote management looks like.

What they do not do is tell you whether their own charges are reasonable, file your US tax return, represent you in court, decide whether you should sell, or price their own repair work independently. Every one of those needs somebody else, and the reason is not honesty. It is that nobody is a neutral judge of their own invoice.

The clearest example is repairs, where there are three ways a manager can make money on work at your house and only one shows on the bill, which I set out in how managers make money on repairs.

3. Why should the contractor be yours rather than theirs?

Because it is the only way to price anything.

Once you have one contractor in the market who answers your calls, every repair bill becomes checkable. You take the spec off the invoice, send it to them, and ask what they would charge. Two quotes, no argument, five minutes.

I do this once a year on every property and on any job over a couple of thousand dollars. The outcomes are all useful. The quotes come back similar, and you stop worrying. They come back well below, and you have a conversation to have. Or they come back higher, which happens, because a manager with volume genuinely does get better prices sometimes.

The one arrangement where you need more oversight is the manager who owns the maintenance company. It is legal, it is common, and it is not automatically wrong. But it means the person choosing the work, doing the work and pricing the work is the same person, and you are four thousand miles away. If that is the setup, insist on two outside quotes above an agreed figure and get it into the agreement, which is one of the clauses in the management agreement clauses a remote owner must check.

I fell foul of this with some rental properties I owned in Pennsylvania. I had one person acting as manager and contractor, and it went well for a while. Then I found out, through my network rather than through any statement, that the work was being subcontracted to the cheapest bidder and marked up to me. The full account of that arrangement, and the clause that would have stopped it, is in the agreement article linked above.

The point for this article is how I found out. Not from a document, and not from the manager. From another investor in the same market, who had a contractor I did not.

4. Who handles the tax filings?

A cross-border CPA, and this is the role where the cheap option is genuinely a false economy.

An American accountant who is excellent with American clients may never have filed for a non-resident, because it never comes up in their practice.

The specific things you need them to know are the withholding election that stops America taking 30% of your gross rent, set out in how to stop the 30% withholding, the annual filing that comes with a foreign owned LLC, in the $25,000 form nobody mentions, and how your own country will treat the same income, which is the argument in the US tax guide for foreign investors.

Ask two questions when you hire one. How many non-resident owners do you file for, and have you filed Form 5472. If the second question needs explaining, keep looking.

Expect to pay $250 to $1,500 a year for a straightforward single property filing. It is one of the few professional costs where I would not shop on price.

I recently had a property manager's CPA tell one of my clients to file the wrong form. They did it with confidence, and they were wrong. It could have cost my client thousands in tax.

5. Do you need an attorney before something goes wrong?

You need the name before something goes wrong. You do not need the hours.

The moment you will want one is an eviction, because in many states your manager cannot represent you in court even though they collect your rent. It varies more than almost anything else, and it gets narrower still if the property is held in an LLC, which most of ours are. I set out who may act for you in 21 states in how to evict a US tenant when you live in another country.

The other moment is your first management agreement, particularly the indemnity clause. One hour of a local attorney's time on your first contract is money well spent, and you will know what you are reading on every one afterwards.

If your property manager uses a particular firm for evictions, get the name ahead of time so you know who you're working with. Check the firm exists, and file it. That is the whole job until you need it.

6. What about the agent, the title company and the lender?

These three are transaction roles rather than operating roles, which is why they sit at the end of this list rather than the beginning.

A buying agent matters if you are sourcing your own deals. If you are buying turnkey, the seller is the counterparty rather than a team member, and your protection is verification instead, which is the ten checks you can run yourself and the turnkey due diligence checklist.

A title company that has closed for foreign buyers before will save you a fortnight of confusion, because remote closings, notarization and wiring instructions all have foreign-buyer wrinkles. The full sequence is in the foreign national process, done remotely.

I recently had a title company pull out of a client's deal because they did not know how to handle a remote notary signing for a non-resident. They're a perfectly good title company. They just were not geared up for cross-border buyers.

A lender or broker you can call is worth keeping warm even when you are not buying, because they see the market weekly. Do not let them be your only source of opinion on it, but do not ignore what they see either. How the loan itself works is in the foreign national DSCR loan guide.

7. What does the whole team cost?

Less than people expect, because most of it is pay as you go.

The manager is the only continuing cost, at 8% to 10% of rent plus fees, which on an $1,800 a month house is around $1,728 a year before the extras. The full picture is in what US property management actually costs.

The CPA is $250 to $1,500 a year. The attorney is nothing until you use them. The contractor is nothing until you use them, and when you do, you are paying for work you needed anyway. The insurance agent is paid by the carrier. The lender is paid at closing.

So the honest answer is that a full team adds a low four figure annual cost over the manager alone, most of it the CPA, and it is the thing that makes every other number checkable. Put your own property through the cash flow calculator with the professional fees in it and you will see it is a rounding error next to turnover, which is the largest running cost most owners never model, set out in what a turnover actually costs.

8. How do you find these people from abroad?

The same way you would at home, minus the coffee.

Referrals from investors who own in that market are the best source, and the best question is not who do you use but who have you stopped using. Your existing team members are the second source: a good manager knows the attorneys, a good CPA knows other CPAs.

Verify what can be verified. Most states license property managers and real estate agents through a real estate commission, and licenses are searchable through the directory of state regulators. Trade body membership, such as NARPM for managers, tells you somebody has agreed to a code of ethics, though it is voluntary rather than a license.

And share. Most of this team can be shared with other investors in the same market, which is how most people I know built theirs. The contractor does not care that you only own one house, as long as you pay on time.

Ronald, one of my clients in Ottawa, is buying his second Kansas City rental, and the team he assembled for the first is doing the work on the second, which is where the effort pays back. His purchase is in his case study.

9. What breaks a team?

Three things, in my experience.

Concentration. When one person is your manager, your contractor and your source of market opinion, you have no second opinion available at the moment you most need one.

Silence. A team you never speak to is not a team. I send my CPA a note in October rather than in March, and I call the contractor before I need him. Both cost nothing and both change the response time when it matters.

And spreading too thin across markets. Every new market means a new version of all six roles, which is why I concentrate in two rather than owning one house in six cities. Less of a Jack of all trades, closer to a master of one or two.

If you would rather start with a team that already exists, that is part of what our remote management service is built around, and the team checklist is in the foreign investor starter kit.

The bottom line

The manager is the hire everybody obsesses over. The contractor is the one that changes the relationship.

Once you can price a repair independently, every conversation with your manager is different, and it is different without you ever raising your voice or accusing anybody of anything. That is what the team is really for. Not doing more, but knowing more, from a long way away.

Build it in the order in section 1, keep it small, share it where you can, and speak to people before you need them. It costs a low four figures a year and it is the difference between owning a property and simply hoping about one.