Hi there - we have had rentals for about 6 or 7 years now and currently have 3 SFHs that we manage ourselves (all within 20 mins of our home) and 8 condos that is managed by someone else and 4 condos that we just recently took over the management but hired an on-site person to handle the day to day. Here's a summary of our experiences:
1) Property Management Companies CAN NOT manage the way you can. People told us that time and time again, but we did a lot of research, background checks, site visits, interviews, etc., but at the end, had to fire two licensed property management companies because they were totally incapable of staying on-top of my properties (ie., paying a second repair person to come in to fix the same thing another repair guy fixed a week ago) and/or they charge you for every staple (seriously!) or other silly little thing they 'use' to manage properties!
2) If you travel a lot but can do some management on your own, then it could work --- use a home warranty company to do on-going repair of appliances, HVACs, plumbing, etc, but be sure to be there to handle the expensive expenses like replacing carpet or fixing a broken sewer line to make sure you get the best estimate and/or verify if you even need to do it.
3) Start small and make sure you go thru a full year with your investment before taking on any more. We got very lucky with all of our SFHs (had same tenants for 4 or 5 years now) so we got cocky and bought 12 more and thought we can get someone else to manage it like we managed ours....NOT the same!
If you want to be a landlord, you'll have to get your hands dirty to make money. If you just want RE investments that are on auto pilot, take a look TICs or REITs....I don't know much about them, but they would have been a good option for us instead of all the headaches we just went thru.
ANOTHER option, however, is the hybrid....we fired our 2nd PM and decided to manage one of our buildings (4 condos) ourselves. Because we are very busy and are 500 miles away from the property, we decided to hire an 'agent' to represent us (basically, she shows the units to rent, but I handle the background check; she answers maintenance calls, but I give instructions on which vendors to get quotes from, etc. and make the decisions). I carry all the liability in this instance since I am really the "PM" but just hired an agent to be my legs and arms to implement what I decide....nice thing is that I have control, manage things the way I want, but not spend as much time on day to day stuff. So far, this model seems to work...she was able to get a vacant unit rented in 5 days and ask for more rent than any of the PMs ever did! Soon, we'll be selling this (1031) and doing the same thing for our other units, I think! Wish us luck!