No matter how many times you make plans, some things end up not being in your control. This can apply to becoming a long-distance landlord. It may not be your desire to manage your rental space from afar but you need to relocate for your work and so, you decide to convert your residence into a rental unit. Or maybe you’re just looking to invest out of state in some more lucrative property.
With modern technology available, things have become easier but still, there are challenges faced by long-distance landlords along the way.
Here are useful tips to keep in mind:
1. Choosing tenants you can trust
Even if it sounds easy, welcoming the right renter to your rental property can be tough since you have less time to make mistakes. You can’t drop by the rental anytime to do an inspection or engage with the residents in person.
If your tenants don’t follow the lease or property policy, it can lead to headaches. That’s why it’s vital to develop a good tenant screening process and set your criteria. Frequent turnovers can lead to vacancies which can also be a challenge to handle when you’re a long-distance landlord.
Make sure that you are thorough in evaluating a candidate’s rental history, credit score, income, and employment. You can call up former landlords to learn more about the potential tenant. Running an extensive tenant screening can indeed consume a huge chunk of your time, but it will save you from future stress.
2. Nurture an open communication
Once you welcome a top-tier tenant into your rental space, the next priority for a long-distance landlord is to ensure that the lines of communication stay open. Given that you won’t be able to drop by for a visit spontaneously, you will rely on your renter to provide regular property updates.
Is there a water leak? Do the toilets need to be replaced? Did the toaster break down? Knowing these early leads to lower repair fees, rather than fixing issues when the problem has graduated to a major scale.
A great way of keeping communication lines open is to always be reachable. Your renter must have access to your current contact information so they can call you anytime an issue surfaces, but most especially when a property emergency occurs.
You can also consider taking the initiative to do a monthly check-in with a renter by calling them. This strategy keeps you updated on how your renter is faring and the state of your property. But do remember to observe boundaries and avoid being nosy. The privacy of your renters should be honored.
3. Plan to visit your rental place at least once a year
Landlords may balk at the cost of visiting their rentals often but the US tax law has provided advantages for landlords. It has categorized out-of-state rental visits as fully tax-deductible expenses.
You can deduct the costs of flights, mileage, hotel accommodations, and meal costs from the profits earned from renting out your property. Long-distance landlords can now plan to visit their rentals and maximize their tax benefits to check up on the condition of their rental property investments and the satisfaction level of the tenants.
Otherwise, you would only rely on the reports provided by the renter which might not match the reality of the situation.
Since investing in real estate requires plenty of capital, you want to make sure that everything is working great and your property is in top condition. You can ensure that this is the case when you drop by for a visit.
4. Be aware of the competition
Another challenge faced by a long-distance landlord is the lack of immediate access to information surrounding the rental unit and the local area. When you’re away, you miss the changes happening around the community.
You may not have any idea of the local updates, the business climate, and the changing demographics which can work against you. It can be tough to create business strategies to attract potential tenants without understanding the current market condition of the area.
Is there new infrastructure being built? Are there newer rental accommodations in your neighborhood? These are critical questions to answer since they can affect your rental pricing.
You don’t want to increase your rates when everyone else is reducing theirs due to a lower rental demand. At the same time, you don’t want to miss the opportunity to increase your prices when housing demand is high.
A good way to ensure your rental business is competitive is to stay abreast of the latest news. Always be in tune with the economic conditions and the rental market demand to make timely decisions.
5. Opt to build a local network
Property damage is bound to happen and can result from normal wear and tear. That’s why you need access to local resources to ensure everything is fixed properly and on time. As a long-distance landlord, it can get stressful to hire contractors quickly when issues arise since you have not vetted their work yet.
Compared with a local landlord who can reach out to the repair specialists anytime, this can be a challenge for long-distance landlords who cannot immediately head to the rental unit and make a preliminary inspection of the damage. It’s best to be prepared and nurture connections with reliable vendors.
Partner With Local Property Managers for Support
A way to gain peace of mind for long-distance landlords is to work with a local property management company that can attend to the everyday tasks of maintaining the rental property.
With a professional team working for you, marketing a vacant unit, performing tenant screening, conducting property inspections, and collecting the rent can be easily managed.
The best thing about working with a local property manager is that renters can rely on an experienced team to handle property issues right away. Property management firms have a trusted network they can call on to deal with property damage and emergencies, ensuring that prompt repairs are done.
If you’re a long-distance landlord looking for dedicated property management support, contact Keyrenter Denver today! We can help make your rental property a success.