Becoming a long-distance landlord is a big decision, but it can be very rewarding. More often than not, people become long-distance landlords when they move to a different state and decide to rent out their property. Converting a residential unit into a rental space can create another source of income which is a definite advantage.
The great news is that technology nowadays makes it easy for long-distance landlords to monitor what’s going on in their rental business. But even so, there are certain challenges faced by long distance landlords. It helps to know essential practices when managing your rental properties from far away.
Here are key things to keep in mind:
Trust Your Tenants
Since you’ll be managing your property remotely, it’s crucial to seek renters you can rely on. You need dependable people who treat your rental unit right and perform their tenant duties even without you physically checking in. If you accept the wrong tenant, your stress multiplies as a long-distance landlord.
Since inspections are not easy to perform from a distance, it’s advisable to design a good tenant screening system to avoid bad renters. Review the tenant’s history and verify the information provided on the application form.
Though there are costs associated with background checks, it’s still highly recommended to perform checks to ensure you can trust the tenants occupying your property.
Once you have residents living in your rental unit, practice open communication, especially if you’re a long-distance landlord. You need to know what’s happening on your property. Open communication ensures you know the state of your unit.
It’s best to learn early if there are leaks, damaged home systems, or even minor concerns so you continue providing a habitable home for your tenants. If left unattended, minor problems can escalate and become giant headaches. It’s best to immediately fix even tiny issues outright to reduce repair costs.
Provide your tenants with your contact information. In case there are changes, let them know about your new number so if they want to speak with you, you’re reachable. Doing this reassures the renters that you’re available if they want to report anything.
You can also schedule once a month check-ins with the residents to learn about the condition of your property. However, remember to mind your tenants’ privacy.
Visit Your Rental Annually
If you live far from your rental property, visiting it is needed to assess the reality of its condition. A visit may be expensive but under the United States tax laws, out-of-state visits to rental homes are tax-deductible.
Long-distance landlords can subtract the flight, accommodation, mileage and meal expenses legally from the income generated from the rental.
An annual visit, or a visit every time the property is vacant, ensures you reap the tax benefits. It also makes you aware whether the rental’s condition is still up to standards. Engaging with tenants in person also helps you to determine if they’re happy staying as residents. If you simply rely on what’s reported by the renters, you may not know all the details.
It’s good practice to consistently perform a property visit as a long-distance landlord to see the property yourself.
Stay Up to Date With Your Competitors
As a long-distance landlord, you may not have immediate access to information about the neighborhood your rental is in. There may be new local regulations, market shifts, and changes in the business climate. Keeping up with the community from a distance allows you to come up with new strategies and adapt quickly to the new environment.
The state of the economy is always changing, including the neighborhoods and rental rates. It’s important to go with the flow. If there’s an increase in market demand due to the new infrastructure, it’s a great opportunity to increase the rental rate. If competition is more intense, it would be good to lower the rent slightly.
Research the rental market trends in your area so you can adjust to the market fluctuations and optimize your rental income. Keeping up with these factors can increase your success as a long distance landlord!
Find Local Help
It’s advisable to build a network of local vendors to help you with property maintenance, repair, and emergencies. With a team of local maintenance specialists, you can call on them to take care of aspects of rental management that matter most to tenants.
If you fail to coordinate a reliable maintenance network, you may be forced to contact people you haven’t worked with previously. This could quickly become problematic and uncomfortable for you if you don’t know or trust the people making changes to your rental.
Hire a Property Management Company
Engaging the services of a local property management company can help ease some of the stress associated with being a long-distance landlord. A property management company from the area will have experience and knowledge on the market.
Their professional team would also have solid skills and experiences making it easier for you to trust them to take care of your rental unit in your absence.
Property management companies often have outstanding marketing skills and can effectively find a high caliber of renters to limit your vacancy. Their teams have a well-designed tenant screening procedure. They can also help you set the right rental rate, perform property walkthroughs, and collect the rent in time.
Among the greatest contributions property managers bring is taking over your rental home maintenance tasks. You can also access an established vendor network through them.
Becoming a long-distance landlord is a big decision but comes with multiple benefits. As long as you are well prepared and have a team near your property, having a long-distance rental can be a lucrative investment.
If you’re a long-distance landlord looking for a property manager, contact Bigham & Associates today!