Out of state real estate investing is a fantastic idea. By making the decision to look far and wide for properties, you’ll be opening yourself up to thousands of profitable rental properties across the best US housing markets. But then there’s the catch: how do you manage that property? Thankfully, there are dozens of tools you could use as a remote landlord to successfully manage your rental property. Using this guide, you can learn how to be a successful remote landlord and ensure your property is well-managed.
But First…Have You Found a Positive Cash Flow Rental Property Out of State?
Being a remote landlord is hard enough, but it becomes that much harder when you are starting out your journey with an investment property that doesn’t promise a positive cash flow. So make sure to find a good neighborhood in the location where you want to invest and then perform a thorough rental property analysis. You can do all of this (and so much more) from the comfort of your own home with Mashvisor.
1. Use the Right Services to Advertise Your Rental Property
As a remote landlord, online listing websites can be your best friend. These services can place vacancies in front of thousands of potential renters and ensure you’ve received the right exposure. Best of all, you can run these listings from wherever you happen to be! While street signage and local publications shouldn’t be overlooked as advertising methods, you may often be able to find tenants via online listings. The widespread adoption of these services means they are now the first place many renters look for their next home.
2. Screen Your Tenants
One of the most important things for any remote landlord is to find the right tenants. To find these right tenants, make sure you have a good procedure for screening applicants. In addition to credit scores, you may want to request references, such as former landlords. When speaking to their former landlords, be sure to ask relevant questions, such as their history with late payments, or whether their behavior has ever warranted complaints from neighbors. Having these kinds of procedures in place will ensure that you’ve found reliable tenants.
Once you have found and screened tenants, consider negotiating a long-term lease with the residents of your rental property. This will ensure that your property won’t need much hands-on interference, and make your work as a remote landlord much easier.
3. Communicate Often
It’s almost 2020, and it’s never been easier to communicate. Be sure that you are a frequent and diligent communicator with tenants, to guarantee their satisfaction with this arrangement. Frequent communication will help you develop a strong relationship with the residents of your rental property and keep their favor for (hopefully!) years to come. Being a remote landlord means you’ll need to be available via phone and email at all times.
4. Leverage Your Network
Just because you’re far away doesn’t mean you’re not on top of things. The great remote landlord will have a strong network of professionals to carry out any task and ones who are trusted enough to complete their work without supervision. For example, with the right people, you can schedule regular maintenance of your rental property and be assured that the job will be done well. If you’re managing a property from a distance, it is crucial that you find the right people to get things done.
Becoming a landlord with the right network can take some time. But by developing your networking skills, and taking a proactive approach to your interactions, you’re on the way to building a fantastic network.
5. Take a Tax-Deductible Trip to Your Rental Property
Due to a very advantageous tax code, long distance real estate investors are able to pay tax-deductible visits to their rental property. While having a good system in place will ensure that you don’t need to intervene very often, it is nevertheless crucial that you make occasional visits. This way you can ensure the income property is in top condition, and that tenants are free of complaints. Be sure you’re brushed up on the tax codes which apply to out of state real estate investing, since there may be a lot of financial advantages to your case.
6. Establish an Online Rent Payment System
Collecting rent sounds like a daunting task for any remote landlord. But fear not! With the advent of an online rent payment industry, this task has become significantly more manageable. By using an online rent payment system, you won’t have to physically gather a single cheque, or waste a single moment at the bank — just sit back and wait for the rental income to roll in! This system requires very little intervention since most tenants will pay via automated bank transfers. The only time you’ll need to intervene is in the circumstance of a late or defaulted payment, which shouldn’t be frequent if you’ve found the right tenants.
7. Inspect the Rental Property
Since you won’t be nearby to keep things in check, it is important that you have a clear record of the rental property’s condition before it’s inhabited. Hiring a professional home inspector can be hugely advantageous to you in this regard. After they’ve completed their walkthrough, you’ll be provided with a detailed report of the home’s condition — one which is credible and holistic. This can then be used as a benchmark for any damage which may occur, and which you might not be able to keep track of as a remote landlord. Doing the proper inspections is crucial for any rental property owner, especially when managing rental properties from a distance.
8. Be Prepared for Emergencies
When you’re out of town, it can be substantially more difficult to deal with an emergency. As such, it would be wise to take the necessary precautions and guarantee that you’re ready to deal with any situation. Foremost, you might want to look into more comprehensive insurance plans, covering things like theft and vandalism. While this may cost a bit extra, it could definitely be a worthwhile investment as a remote landlord. As well, it may be wise to establish a relationship with a local property manager or real estate professional who can step in, in your absence.
Using these tips for landlords, you can make sure long distance real estate investing goes well for you. Buying a rental property out of state can be a highly rewarding experience, and might offer you a return on investment that would otherwise be unattainable. If you’re using the right tools, taking the right precautions, and recruiting the right people, remote real estate investing becomes a much more manageable task.