What You Need to Know About Being a Long-Distance Landlord
If you have considered the idea of buying rental property, you probably have a vision in your mind of how life will be as a landlord. You picture checks coming in the mail from tenants each month, and you dropping in to check on your property when you are in the area. But what if you buy property that is not really nearby? A landlord’s plan of action is required to properly manage property from a distance.
Perhaps you think repairs will be rare and your tenants will be great at upkeep, but life often throws you challenges, especially when you’re the landlord. If you buy property that is a time-consuming drive from your home, how will you oversee your investment and manage its immediate (sudden) needs or concerns of your tenants?
But, being great long-distance landlord and managing your investment well can be accomplished if you have a plan.
Here’s a few tips to make sure your investment is set to run efficiently and profitably:
- Find Local Management: Hiring a property manager is often the best solution to the myriad of issues that can arise when you are a long-distance landlord. But it needs to be an experienced person you feel you can trust who will oversee everything and keep you informed of any potential issues before they become problems. This person will be your eyes and ears so you need to feel comfortable entrusting them to serve in your place when you are not there.
A good property manager’s help begins from day one of renting, assisting your with tenant questions that arise as they settle into the rental property, reinforcing any rules as they get alimented to living there. Your property manager can then serve as the middle man between you and your renters; like being responsible for collecting rent, coming to the aid of residents who got locked-out, inspecting the property to make sure it has not been damaged by your tenants or by nature, provide general maintenance and upkeep, and handle emergency repair situations (like being there for repair technician’s arrival and overseeing the repair).
- Choose Tenants Carefully: Sometimes it pays to enlist the help of Realtor that handles rental property as you begin your search for tenants. You need to be certain that the tenants you choose are trustworthy, do not have a record of skipping rent payments, or have been known to damage past apartments. It is wise to have a professional take the applications from interested tenants, screen credit worthiness, and check references from past landlords.
- Plan for Emergencies and Repairs: When you own property, you now it is only a matter of time before something breaks or is need of repair. Have an action plan for every scenario, like the furnace breaking in the middle of winter or the water pump suddenly failing to produce water. These are things that tenants want (and need) to have fixed immediately, so if you are not in the area you need to know who to call that locally serves that community. So, research which companies and repair contractors offer services in the area of your investment property. Check out their rating with the better business bureau and speak to them before a crisis occurs to ask questions, costs for service calls, get client references, and ask about emergency numbers to call on weekends and after hours.
- Put a portion of your rental income aside in a savings account specifically to pay for repairs (and maintained) when needed. This emergency fund is something that should at least cover a large portion of any unexpected crisis.
By planning ahead, doing your research, and enlisting the right professional help, you can save yourself a tremendous amount of time and trouble when you are a long-distance landlord. Don’t assume you can stay on top of any issue from the comfort of your own home without an action plan, someone there to manage the unexpected emergency, and professional oversight of your investment.
Contact one of our commercial advisors to ensure you make a sound investment!
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