Being a long distance landlord comes with many challenges. When you are miles away from your rental property, it can be difficult to tend to it effectively. But there are some tips you can employ to make the job easier.
How to Be Long Distance Landlord
Contrary to popular belief, being a landlord isn’t a walk in the park. Successfully managing a rental property takes time, skill, and effort. Managing a rental is hard enough when you’re close by and even harder when you’re located miles away. But it’s possible to be an effective landlord even when you’re separated by distance from your rental property.
Here are the best tips on how to manage out of state rental property.
1. Get Good Tenants
It all starts with good tenants. As an out of state landlord, you want to leave your rental in good hands — a tenant who will take care of the property, follow all your rules, and pay their rent on time. This dramatically minimizes the headaches that a landlord might face.
Finding good tenants, though, can take a lot of work. You must conduct thorough screenings, including checking their rental history, employment, credit, and criminal background. It would be best if you also asked for references, then you can try to contact those references individually. But, as with any tenant screening process, it is essential to keep Fair Housing laws in mind.
You should also make sure that your rental is worthy of quality tenants. If renting out a dingy and poorly maintained unit, don’t expect good tenants to come flocking in. You should also do your best to find to attract trustworthy tenants.
2. Have an Ironclad Lease
Since you won’t be around to check in regularly, having an ironclad lease is imperative. Your lease should clearly state the terms of the agreement, including any rules you may have for the tenant. Before signing the agreement, tenants should understand what they can and can’t do on the premises. Clearly defining your lease terms will make it easier to settle disputes and, if need be, evict a tenant if they violate the lease.
3. Communicate
Communication is the key to all great relationships, including the relationship between a landlord and their tenant.
Make sure your tenant can reach you even when you’re miles away. That means setting up channels like email, phone, and online messaging. This way, they can quickly contact you in an emergency.
Since your tenant will see you infrequently, it is equally important to check in now and then. Ask them how they are doing and whether they are satisfied with their lease. This is especially critical when you have a quality tenant. When you keep the lines of communication open, you can make them feel heard and appreciated, leading to a higher chance of renewal.
If you plan to travel and will be out of touch for a while, let your tenant know beforehand. Provide them with your itinerary as well as alternative contact details. In doing so, you won’t be entirely unreachable.
4. Automate Payments
Managing a rental property out of state is extra hard when you still need to use updated payment methods. Tenants will have difficulty sending you checks or cash when you’re in a different area. As such, it is best to set up more convenient modes of payment, particularly those that offer online services. This will make it easier for tenants and minimize the risk of late payments.
5. Work With Reliable People
As a long distance landlord, you can only make physical visits sometimes. Since you can’t appear in person, having someone you trust to check in on the property for you is good. Ask a close friend or relative to drop by every once in a while. They don’t have to enter the unit; even passing surveillance of the premises will do.
The same goes for maintenance and repairs. Make and maintain the right network of people, including handypersons, electricians, plumbers, and general maintenance specialists. Hire someone to perform maintenance work regularly. The key to a successful long distance rental is working with a team of reliable people.
6. Have the Right Insurance Coverage
Insurance is paramount whether you’re a long distance landlord or not. The type of insurance you should have will ultimately depend on the property you manage. That said, it is ideal to have coverage for theft, floods, lost rental income, fires, and liability. You should also require your tenant to have renters insurance to cover their items.
7. Hire a Property Manager
Even when you apply all of the tips above, managing property from a distance can still feel impossible when you don’t have enough time to devote to it. In many cases, it is just better to hire a property manager.
A property manager can perform all the tasks that a landlord normally would, from advertising the rental and screening tenants to preparing the lease agreement and conducting inspections. Some even offer eviction services if the need arises.
Should I Be a Long Distance Landlord?
This is a question many property owners (or would-be owners) ask. But, as with many things, you must consider the pros and cons of long distance landlord work.
One benefit of being a landlord is earning additional income. But that comes with the territory whether you live far away or not. A less obvious benefit of managing a rental from afar is the possible tax deductions. Depending on the property’s location, you can take advantage of certain tax benefits that aren’t available where you live. Plus, there may be more investment opportunities if the market is good.
There are also downsides, though. You need to learn more about the rental rates and renter behaviors in a market far from you. You also have much control over your rental because you can’t do in-person interviews, inspections, and maintenance. The good news is that you can quickly fix these by researching, using technology, or hiring someone to do these for you.
If you have the time and skills, you can manage a property from a distance. But, sometimes, landlords don’t have a choice. Here are some instances that would push you to become a long distance landlord.
1. It’s Your Second Home
Vacation homes are very popular, especially in Florida. But many owners need help finding the time to stay in those homes. Most owners just put their vacation or second homes up for rent to avoid the risk of neglect.
2. You Inherited the Property
Some become landlords because a relative has died and left them their property. The only problem? The property is across the country. While most people might decide to sell the inherited home, some rent them out instead.
3. You’re Moving Away for a While
If someone has to move away temporarily (for work or whatever reason), they will still need a home to return to. As such, instead of selling the place, they decide to put them up for rent for the time being. This way, they can earn extra income and still have someone care for the property while they’re gone.
4. It’s Just a Good Investment
Not all housing markets experience the same ups and downs. Some people invest in a property from another state to take advantage of the real estate and rental market. It’s an excellent way to earn a nearly-passive income.
Is Being a Long Distance Landlord Worth It?
As you can see, managing a rental property from afar has both advantages and disadvantages. Whether it is worth, it depends on your specific situation. You can quickly remedy the downsides of long-distance rental management, though, by hiring a property manager.
If you’re looking for a property management company in Florida, our online directory is the best place to start!
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