How to Be a Long-Distance Landlord
Becoming a full-time landlord can be an extremely lucrative venture, but it’s not without its challenges. For instance, what happens if a landlord has to relocate but wants to keep their investment rentals? Or what if they find a great deal on a property in another state?
Believe it or not, landlords don’t have to physically oversee their unit or house to get a good return on their investment! Nowadays, many investors choose to become long-distance landlords or hire property managers.
Even if you live hours away, there are ways to easily manage your house or unit while renting it out to reliable tenants. If you're unsure about local market conditions, you can also work with a real estate agent to help you find the right property or tenants.
A property manager will ensure that all property rules are followed, including the lease terms, and that the rental price is competitive to attract the right tenants. Additionally, they can help you manage security deposits and ensure that the surrounding community and apartment complex are well-maintained.
At MTD Property Management, we aim to help you find financial freedom and flexibility in the world of real estate investments. In this article, we go over what it means to be a long-distance landlord and how to manage your house, rentals, or apartment complexes effectively, even when you're miles away. So, keep on reading!
How to Become a Successful Long-Distance Landlord
Long-distance landlords are investors who own and manage a unit that is located at a considerable distance from their primary residence. Whether you invest in a rental house across your state or across the country, being far away can impact how you manage your property. Understanding and complying with local laws, including handling security deposits, becomes even more crucial when you're not nearby.
Luckily, there are many things you can do to successfully maintain your rental house from a distance, including:
1. Select the Right Property
If you’re thinking of investing in real estate in another state, you must choose the right property. Landlords should begin by choosing a property in a popular area; otherwise, they might have a harder time finding renters and earning a stable income.
Additionally, it’s best to consider a property that are relatively low-maintenance and has desirable amenities. This will make your life easier and ensure you get a good
return on investment.
2. Screen Tenants Thoroughly
Every landlord wants to find trustworthy tenants. As a long-distance landlord, this should be your top priority. Since you’re not able to conduct regular, in-person property inspections, finding reliable and responsible tenants for your property is crucial. That’s why you must have an effective tenant screening process in place to ensure that renting your property will be a smooth and profitable experience.
You can also rent to family members, friends or referred tenants but you should be aware of the risks. By conducting comprehensive background, credit, and reference checks on prospective tenants, you can significantly reduce the risk of property damage, problematic or holdover tenants, and evictions.
3. Use Technology
There are many ways you can leverage technology to make your life easier as a landlord. Investing in smart home technology, such as keyless entry systems and security cameras, can help you remotely monitor and secure your rental house.
Additionally, you should consider investing in management software. This can help you keep track of rent payments, maintenance requests, and even important rental documents.
4. Keep Open Lines of Communication
Communication is key to building long-lasting relationships with your tenants and resolving issues promptly. To keep in contact with renters when you’re living out of state, make sure to provide them with your contact information and set up different channels of communication.
Whether you communicate through email, phone calls, or text messages, make sure to respond to tenant inquiries and concerns promptly.
5. Prepare for Maintenance and Repairs
Maintenance is inevitable when you own a rental home, so it’s best to take a preventative approach. Even as a long-distance landlord, you should inspect your rental at least once a year. This can help you spot and resolve problems before they become urgent and costly repairs.
It’s also important to establish an
emergency fund to cover unexpected maintenance issues that may come up. Additionally, you should have a plan for emergencies. Take the time to search for reliable contractors in the area so you know who to call in case of an emergency.
6. Automate Rent Collection
Rent collection is one of the most time-consuming tasks landlords have to deal with, and collecting rent effectively can become more challenging if you’re
self-managing your rental remotely.
If you’re a long-distance landlord, you should consider automating the rent collection process to make it easier for tenants to pay rent on time. Whether you choose an automatic payment system or rent collection software, these tools can greatly improve the chances of on-time payments, making it easier for tenants to pay their month's rent and any additional fees, such as the pet deposit.
7. Visit Your Property Once a Year
Even if you live away, you must inspect your rental home at least once a year. This will help you ensure your unit is in good condition and spot any problems before they turn into more urgent repairs. Plus, it’s a great opportunity to meet your tenants and ensure they’re complying with the terms of the lease.
The good news is that visits to your out-of-state rental property may be fully tax-deductible. By deducting the cost of plane tickets, hotel stays, and meals you can save money while ensuring that your investment is in good condition.
8. Hire a Property Manager
A rental property is a huge investment. So, it makes sense to want to ensure it’s always protected. As a long-distance landlord, you won’t be able to physically inspect your rental on a regular basis. However, you can hire a trusted
property manager to handle the lease management for you.
A local property management company will be familiar with the area and its rental market, so they can help you with anything from finding the perfect property to marketing your rental.
These professionals can also take care of the day-to-day operations of managing property, including tenant screening, rent collection, property maintenance, lease management, and maintaining local contacts with helpers such as cleaners. This way, you’ll be able to rest easy knowing your rental property is in good hands!
Conclusion
Becoming a long-distance landlord can seem challenging, but it doesn’t have to be so! You can successfully manage a rental property remotely with careful planning, good lease management, reliable contractors, and efficient technology.
By following the tips in this article, you can overcome the challenges of managing rental properties from afar while reaping the financial rewards of real estate investments.
Are you looking for a seasoned management company in Chicago? Contact
MTD Property Management today! With over two decades of experience, we’ve helped many out-of-state investors keep their rental properties safe and profitable. As your property manager, we’re ready to bring our expertise to your investment and ensure its success. Let us, as your trusted property manager, help you achieve your property goals with ease!
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