How to self-manage a rental property being a long-distance Landlord
Managing a rental from a distance is not without its challenges being an out-of-town landlord can come with a few hang-ups, for instance, it doesn’t allow you to easily respond to emergencies like you would if you lived close to your investment property. This is not to say you can’t successfully manage your rental from a distance.
Here are some tips in Making Long-Distance Property Management Work for You
1. Choose Trustworthy Tenants
Since you will not be close enough to go to your rental at a moment’s notice, it’s extremely important that you trust your tenants.
When renting to someone you don’t know, make sure you conduct a thorough screening of their rental background before allowing them to move in.
Ask them to complete a rental application and be sure to contact their references.
Peace of mind of knowing that your property is in good hands.
2. Have a Handle on Maintenance
The type of property you have affects the amount of maintenance and attention you will need to put towards it. Make Friends with Repair People if you are renting you will need to source local trades, someone reliable and can regularly attend in emergency cases including weekends and holidays.
Maintenance, repairs, and other complaints all come to you as the landlord of a rental property. When you are out-of-town, you must find other ways of dealing with these situations. A handyman, electrician, and plumber are good contacts to have. If there is ever a leak or electrical problem that needs to be fixed immediately, you can call on them to get the job done and bill you later. Alternatively, you can negotiate with your tenants and have them organise works, one of the draw backs with this is, you are not assured of the level of works carried out and overpaying on repairs.
3. Ask Someone to Check in
Unsupervised tenants leave more room for mischief. For that reason, enlist someone you know in the area to be your eyes. That way, if there is a problem, this person can let you know immediately.
4. Go Automated
Getting paid from tenants in another town or city can be tricky. Set up payments so they are automated and have your tenants send you rent by way automated bank transfers. This option only works when tenants have the means or alternatively supply tenants with a bank paying in book.
5. Set Strict Lease Terms – Assured Shorthold Tenancy Agreements
Your property, your rules. It’s best to be clear with your rental terms before the tenant moves in and make sure they understand what you will and won’t allow in your property. For instance, you might want to set up a zero-tolerance policy on having pets or smoking in the suite in order to lessen the potential damage these permissions often cause. Include these terms in your lease and ask your tenant to initial them as proof of agreement.
6. Communicate Often
Long-distance communication between long-distance landlords and tenants can be difficult, but workable. As a landlord, it’s your job to establish regular communication with your tenants by phone, email, or text message and maintain this line of communication throughout their tenancy. If you plan to travel, or alternatively, if your tenant will be gone longer than 3 or 4 days, agree to tell each other so there are no surprises when you can’t get a hold of one another. Provide them with various contact methods, as well as additional contacts, such as your proxy landlord, and ask the same from them so you can contact each other in the event of an emergency
As with any rental, near or far, inspections are a must. This means an initial schedule of condition report and walk-through inspection before the tenant moves in, as well as another when they move out. Document the condition of each room in a rental inspection report and sign and date it. Know your landlord legal obligations in taking a deposit from tenants. Some landlords opt for regular inspections, especially if you are wary of the condition of the property for some reason (e.g. you’ve recently renovated). If you can make time to travel to your rental, then additional inspections can be reassuring. Just make sure your tenant agrees, and they know in advance when to expect you.
8. Get Insurance Coverage
The type and amount of insurance you need will depend on the type of property you are renting.
There is insurance for:
◾Hazards, such as fires or sewer backup
◾Equipment breakdowns, such as boiler failure
◾Lost rental income
◾Liability insurance for damages, such as falls or slips on the property.
Ask your tenant to get renters insurance as well so their belongings are protected.
9. If All Else Fails, Hire a Property Manager
Managing a rental property from a distance and balancing other aspects of your life, including work, family, and friends, requires superb time management and a lot of patience. Attending to your property can save you money, but it also costs you time in the process. Hiring a property management company to oversee your rental may increase your overhead, but it can also be the right option if you are not interested in managing the property directly, dealing with tenants, or simply do not have the time to invest in caring for a property yourself.