Becoming a long-distance landlord can be a great way to find the best rental deals. When you’re not limited to properties in your geographic area, a whole new set of investment opportunities is opened up to you.
However, living far away from your rentals also has its challenges, the most obvious one being that you can’t readily check in on your properties and tenants.
Photo by Andrea Piacquadio
So whether you’re thinking about becoming a long-distance landlord or you already are one, here are eight tips that can help you overcome the challenges and be successful:
1. Choose trustworthy tenants
The first key to success as a long-distance landlord is to choose trustworthy tenants. The more trustworthy they are, the less you’ll have to worry.
Obviously, you can’t always avoid a bad apple here and there, but with a robust tenant screening process, you can dramatically reduce your risk of getting a bad tenant.
Your tenant screening process should include a credit check and background check, references from past landlords and employers, and a personal interview over the phone.
By finding good tenants in the first place, you can save yourself many of the stresses that come from being a long-distance landlord.
2. Make local connections
Every long-distance landlord needs local connections. If your rental property used to be your primary residence that you moved away from, you may already have some good connections—at least with friends and family in the area. If not, make some.
Local connections can check in on your property from time to time and alert you if they notice anything off or out of order.
They may also be able to provide some basic cleaning and maintenance work or be emergency contacts for tenants. Of course, you shouldn’t leave this work to anyone unqualified for the job. The bulk of your rental management should be left to a reputable property manager, which brings us to our next point.
3. Outsource to a property manager
A good property manager can make your life as a long-distance landlord much easier. They can take on regular property maintenance, tenant management, rent collection, and marketing tasks (among other things).
They’ll also have an established network of professional contractors to take care of any landscaping, repairs, cleaning, and so on.
Plus, a local property manager can respond to emergencies much faster than you can.
Most property managers charge anywhere from 8% to 12% of the monthly rent collected. Shop around for a highly-rated property manager that will satisfy your needs and meet your budget.
4. Set up automated systems
Setting up automated systems can help streamline the rental process. For example, using an automated rent collection system bypasses the need to have tenants mail checks to you. They can just pay online and even set up automatic payments.
Similarly, a maintenance request system can save time and reduce the number of unnecessary phone calls and emails you get. It’s worth shopping for different software solutions and customer relationship management (CRM) systems to find what works best for you. The more you can automate, the better.
5. Set strict lease terms
As a long-distance landlord, it’s important to set clear expectations with your tenants upfront. You can do this by creating strict terms in your lease.
For example, you could set policies regarding pets, smoking, noise, quiet hours, and other potential issues to help prevent problems later on.
Your lease should also outline who is responsible for what when it comes to minor repairs, cleaning, and so on.
Try to anticipate as many potential issues as you can, so you can write them into the lease and make it rock solid.
6. Communicate clearly and often
When you don’t live close to your rental property, it’s especially important to communicate clearly and often with your tenants (and property manager if you have one).
Set up an easy way for them to contact you in emergencies and encourage them to report any issues immediately. If you cultivate a good relationship with tenants, they are more likely to treat you and your property with respect.
7. Study the local competition
Another challenge of being a long-distance landlord is that it may be harder to understand what’s happening in the local rental market because you’re far away.
Changes in the job market, government policies, and the housing supply can all have a major impact on your investment strategy.
So study your local competition to see what they’re doing and how the rental market is behaving. Then make adjustments to your rental prices. Otherwise, you may end up asking too much or too little.
8. Check in on your property and tenants when possible
Lastly, try to occasionally check in on your rental property. This helps ensure it stays in good shape. Just make sure to give your tenants at least a day’s notice before you come by.
Being a long-distance landlord can be difficult, but following these tips will make the job much easier!
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