One of the best things about investing in real estate is that you’re not limited to only investing in your home state or city. In fact, there are several reasons why you might also consider investing in out-of-state properties.
If you find a great deal on a real estate property that has a high income potential for example, you might want to invest in it even if you live outside the area or transitioning from a part-time to a full-time landlord. While investing outside of your home state and being a remote landlord can be tricky, it’s feasible, especially with the right approach and mindset.
Whether you’re planning to relocate and rent out your home or buy an investment property far from your current location, here are some tips on how to be a successful long-distance landlord.
Screen Tenants Thoroughly
Since you won’t be there to inspect your property regularly and make sure your renters are taking care of your investment, conducting a rigorous tenant screening process is crucial. In fact, regardless of your rental location, this process is always important.
If you’re a remote landlord however, you have less room for mistakes when it comes to tenants. Make sure to conduct background checks, including credit checks, financial verification, and references to ensure you are renting to responsible tenants.
Establish a Clear and Effective Communication Plan
Communication is key to any successful relationship, including the one you have with your tenants. Regular communication can be more challenging when you’re a remote landlord, so it’s important to establish clear communication channels.
Since you can’t visit your tenants as often, make sure they can easily reach you whenever they need to. Make use of email, video calls, and messaging apps to stay in touch with your tenants regularly.
Additionally, make sure you respond to tenant inquiries and concerns promptly and effectively. This can also help you maintain good relationships with your tenants and encourage them to renew their leases.
Stay On Top of Legal Regulations
Each state and/or city has different landlord-tenant laws and local ordinances. If you’re investing in a different state, make sure to learn the laws related to operating a rental property in that area, as well as any city ordinances that might affect your rental business.
Familiarizing yourself with local rental regulations and landlord-tenant laws is crucial to avoid any violation. Staying in compliance with the law is important to prevent hefty fines. Moreover, you have to stay updated with any changes in the law and building codes to ensure you remain in compliance all the time.
Schedule Periodic Visits
Periodically visit your rental property to keep tabs on its condition and catch any potential issues early on. It also helps prevent tenant damages. Depending on where your property is located, visiting your rental unit at least once a year is ideal. The good news is that you can deduct any travel expenses (including plane tickets, gas, hotel stays, and meals) from your taxes.
During your visit, check to ensure that your tenants are abiding by your rental agreement and are taking good care of the premises. Inspect the unit for damages and fix any due to normal wear-and-tear.
Keep Your Property in Good Condition
One of the most important aspects of being a remote landlord is keeping your property in good condition. Regular inspections and property maintenance can help prevent small problems from becoming bigger issues. If issues are not dealt with, your rental property's value will deteriorate immediately. This can adversely affect your overall bottom line%20from%20revenues.).
Plan for Emergencies
As a long-distance landlord, you won’t be able to attend to emergencies personally. It’s important to have a plan in place to deal with unexpected situations like a leak or an electrical problem. Make sure you have a list of reliable contractors, like handymen or plumbers, that you can call in case of emergency.
We also suggest making sure your rental property is appropriately insured. Check the level of your coverage and make sure your investment has sufficient coverage for emergencies.
Evaluate Your Investment Regularly
Regularly evaluate your rental property's performance, including its rental income, vacancy rates and maintenance costs. Make any necessary changes to maintain your ROI and keep your rental business profitable.
On top of that, make sure to set a clear budget and financial plan for your property. Regularly review your expenses and update your budget to maintain a steady cash flow.
Hire a Reliable Property Manager
The best thing you can do as a remote landlord is to hire a reliable property manager. A property manager can physically inspect and manage your property for you, handling all day-to-day tasks related to your rental property. With the right property manager, you can be sure your tenants’ needs are well taken care of and your property’s condition is well-maintained.
Look for an experienced professional property management company who is trustworthy and responsive to your needs. A good property manager will also help you stay in compliance with local and state laws and connect you with quality local service providers. They can also help ensure that all your rental documents stay in order.
Bottom Line: Becoming a Long-Distance Landlord
Being a long-distance landlord requires careful planning, effective communication and attention to detail. With the right approach, it can be a rewarding investment opportunity, especially if you find a lucrative deal that might not be available in your current location.
By following these tips, you can manage your property effectively from afar and ensure your investment generates a positive cash flow and generous returns. Partnering with a property manager is also always a good idea, especially as a remote landlord.
If you have questions or need help with property management, reach out to the experts at NFI Property Management Solutions Today. Contact us by dialing (850) 898-1230 and we’ll be happy to serve you.