Although there are many advantages to owning a rental property near your home, not all landlords choose to invest in real estate near their residence. Maybe you’ve moved and want to keep your previous residence as a rental, or you could have found a great investment opportunity across the country. It’s a great way to bring in extra income, but managing a rental long-distance isn’t without its challenges. However, by following these easy tips, you can overcome the physical distance and make the rental process easier for you and your tenant.
When Should You Consider Becoming a Long-Distance Landlord?
Before diving into the tips, let’s go over some of the most common situations that cause landlords to manage their properties from afar.
- Moving temporarily. If you receive a temporary job opportunity or need to care for family in another city, you may need to move but don’t want to give up your current residence. Renting out your current property is an excellent way to hold onto your home and offset its costs until you can move back.
- Inherited properties. Many landlords begin managing properties remotely because they inherited a property from a family member who passed away.
- Vacation homes. Some landlords purchase vacation homes with the intent to rent the properties out when they’re not occupying them.
- Investment properties. Some landlords may find a long-distance property that’s a great investment due to its location, size, amenities, or other factors.
Tips for Long-Distance Property Management
1. Choose the Right Tenants
As a landlord, choosing trustworthy tenants is always one of the most important tasks, but it becomes even more critical when you’re renting a distant property. Since you won’t be able to visit the property at a moment’s notice, you need to be able to trust your tenants.
If you’re renting to a stranger, make sure to conduct a thorough tenant screening, including a credit check, background check, and tenant verification. You’ll also want to have them fill out a rental application. Past due debts, false or bad references, and evictions are all red flags—and they give clues about the type of renter the applicant could be.
If possible, you may want to consider renting to family, friends, or referred tenants—although, keep in mind that renting to people you know isn’t without its own set of risks! However, you’ll have an established relationship with them and peace of mind that your property is in good hands.
2. Hiring Maintenance
As the landlord, it’s your responsibility to keep the property habitable and well-maintained—even if you’re on the other side of the country. Since you may not be able to visit the property easily, it’s essential to have a plan in place to keep up your property in your absence.
The type of property you have will affect how much maintenance will be required. If you have a large multi-family complex or condos, you’ll probably want to hire a regular maintenance crew to take care of things like general repairs, landscaping, parking lots, and other shared areas. If possible, get to know a local handyman, electrician, and plumber that you can trust to handle maintenance and repair issues. Then, if there’s ever a leak or electrical emergency, you can call them to get the job done right away and bill you later.
If you have a detached home, townhome, single-family home, or duplex, you may want to consider hiring someone who can regularly attend to yard work, keep sidewalks clear, and perform similar tasks. Alternatively, you may choose to include a self-service yard maintenance agreement in your lease, which stipulates that the tenant is responsible for the yard’s upkeep.
3. Hire a Skilled Property Manager
If your property requires a closer eye than you can manage, you may want to hire a local property manager who can check up on it regularly. When selecting a property manager, take the time to make sure they’re a good fit—because they’ll help you select tenants, interact with your tenants, schedule maintenance and repairs, and essentially handle all aspects of property management in your stead. Look for candidates who have skills in multiple areas, such as communication, sales, administration, and technology.
4. Have an Iron-Clad Lease
It’s always best to be clear with your rental terms before a tenant moves in—especially if you’re a long-distance landlord. For example, you may want to have a zero-tolerance policy on pets or smoking indoors, since both can cause potential property damage. Before renting out your property, take some time to review your lease. Make sure that all rules are clearly outlined and have the tenant initial them as proof of agreement. The more iron-clad your lease is, the fewer chances there are of having issues.
5. Communicate with Your Tenants Often
Just like a long-distance romantic relationship, long-distance communication between landlords and tenants can be challenging. However, you can offset some of the challenges by keeping regular communication with your tenants by phone, email, or text message. In addition, you’ll want to provide them with additional contact information for any of your approved contacts, like the property manager, maintenance crew, plumber, and electrician. You should also have their emergency contact information.
You may also want to include an agreement in your lease that states you and your tenant will let each other know if either of you plans to travel for more than 3-4 days at a time; that way, there won’t be any surprises if you’re not able to reach each other.
As with any rental, regular inspections are essential to assess damage, determine which repairs are needed, and generally keep an eye on the state of your property. In addition, you’ll also want to conduct initial walk-through inspections when a tenant moves in, and a final walk-through inspection when they move out. The condition of each room should be clearly documented on the inspection report, and the tenant should date and sign to acknowledge they’re aware of the findings.
The frequency of inspections is dependent on how often you can visit the property, as well as your level of comfort about the condition of the property. If you’re able to travel to conduct quarterly, biannual, or yearly inspections, they can offer additional reassurance that your property is in good hands. Regardless, make sure to communicate clearly with your tenant about inspections and let them know in advance about what to expect and when you’ll be conducting them.
7. Get the Right Insurance Coverage
Landlord insurance coverage can help protect you from liability, as well as the potentially devastating costs of losses from rental properties; the type and amount of insurance you’ll need will depend on the type of property you’re renting. As a long-distance landlord, you may want to consider coverage for the following issues:
- – Lost rental income
- – Hazards, like fires or sewer backups
- – Flooding
- – Theft
- – Equipment breakdowns, like furnace failure
- – Liability for damages, such as injuries sustained on the property
It’s important to note that Landlord’s Insurance doesn’t include coverage for your tenants’ belongings, so you should also ask them to get Renter’s Insurance—or even require it in the lease.
8. Keep an Eye on Your Expenses
If you work with a property management company, be sure to review your expenses monthly. Ask them to send you an itemized bill so you can go over each expense line-by-line. You should also read your statements each month so you can keep track of repairs or other unexpected expenses.
You can also budget more accordingly by staying ahead of larger repair costs. Keep track of when certain items will need to be replaced and have several local estimates on file. This will help you budget for the expected costs and allow you to choose vendors with fair pricing.
9. Automate Rent Payments
As a long-distance landlord, collecting rent requires more energy, since you won’t have a local address for tenants to mail it to or drop it off. There’s also an increased risk of tenants telling you their rent check must have been “lost in the mail.” Whether or not they’re being truthful, a lost rent check means it will take longer for you to get paid.
Fortunately, there are many ways to collect and track rent payments online. Many types of property management software allow tenants to pay their rent through ACH or credit card. This helps eliminate the waiting game for rent checks to arrive and deposits the money directly into your account. Not only are online rent payments more convenient for many renters, but they’re also more reliable for landlords.
10. Learn the State Laws
Every landlord, whether managing a property locally or from a distance, needs to be well-versed in the laws that govern housing providers and the landlord/tenant relationship. Since many of these laws are created and enforced at the state level, they can vary greatly from state to state. If your property is located in a different state from where you live, make sure to read up on the laws that apply to your rental property—not where your residence is.
Long-Distance Tenant Screening Services
As mentioned above, tenant screening is critical for protecting your property and your success as a long-distance landlord. If you choose irresponsible tenants, you’ll eventually lose money. Since you won’t have local control over your property, you should be picky about who you choose to live there. Good tenants will be more likely to pay rent on time, take care of your property, and notify you of anything that needs maintenance or repair.
Tenant Screening Center offers convenient tenant screening services to help you select the best renters for your property. Available online 24/7, our screening reports can be ordered from anywhere in the U.S. There’s no need to have the applicant be physically present, making an ideal choice for long-distance landlords. Even better, with RentalConnect, you pass the cost of the screenings onto the applicant. It’s an extremely cost-effective way to get the peace of mind you deserve.
Whether you’re an experienced pro or are just starting out in the real estate industry, being a long-distance landlord can be complex and challenging—but not impossible! The key is to choose the right tenants, be thorough and consistent with your processes, and keep open, ongoing communication with your tenants.
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