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It’s a smart move to invest in rental properties from different locations, as it helps diversify your real estate portfolio. Since you can’t be in two places at the same time, you’ll have to monitor your other properties from a distance, possibly even out of state. If so, how can you still effectively manage the rest?
Key Highlights:
- Investing in rental properties across different locations helps diversify your real estate portfolio, but requires effective remote management strategies.
- Hiring a reliable property manager or local support is essential for handling daily operations and maintaining oversight when you’re out of state.
- Property management software and online payment systems streamline rent collection, maintenance coordination, and lease administration through automation.
- Clear, legally compliant lease agreements and reliable communication channels help set expectations and maintain tenant satisfaction from a distance.
- Out-of-state landlords face challenges such as limited oversight, delayed emergency response, reliance on third parties, and a higher risk of property neglect.
Hiring a Reliable Property Manager
Find a trustworthy property management company to oversee the daily operations of your rental property. To find one, you’ll have to do your due diligence. Research property management services in the area where your rental property is and research each one to determine which is the right fit for your goals.
Another option you can explore is to hire employees of your own, just so you’ll have a man on the ground. However, they might not have the necessary expertise to handle landlord duties, such as leasing vacant rental units, conducting property inspections, handling maintenance repairs, enforcing the lease, and more.
Utilizing Property Management Software
Landlords have been using property management software features to streamline operations and automate tasks that would otherwise be tedious and time-consuming. As you would with property managers, you have to research which tools have the features you need.
Most products already include the basics, such as rent collection, maintenance coordination, automatic lease renewal, and accounting. Advanced features tend to be behind paywalls, but are worth the subscription to make property management easier.
Collecting through Online Payment Systems
Even if you’re capable of managing your rental property in person, adding an online payment system can make your job a lot easier. Additionally, it can increase tenant satisfaction, especially if you have more than one payment channel.
Your options include online banking, tenant portals, cash apps, and property management software. Tenant portals and management systems can automate rent collection and issue late fees when tenants fail to pay on time. Automation is the most important feature an out-of-state landlord can benefit from.
Creating a Clear Lease Agreement
Outlining your rental property terms helps guide tenants in their responsibilities and limitations, which is important for keeping rental operations running smoothly. That could include rent terms, maintenance responsibilities, included fees, and consequences for violations.
Naturally, you need to consider the local and state laws concerning tenants and rental businesses, given that they vary per location. In some areas, there are rent control laws and security deposit amount limits you need to consider before setting terms in your lease agreement.
Setting Up Communication Systems
Near or far, landlords need to establish communication channels so tenants can reach out. They also need to be reliable, especially when residents are trying to contact you about an emergency. Keep in mind that a delayed response can lead to tenant dissatisfaction.
Common communication channels used by landlords include tenant portals, email, phone systems, and hotlines. You need to create one for general communication and emergency hotlines, or even provide your personal number for extreme emergencies.
Conducting Regular Inspections
Since you’re not there to keep an eye on things, regular inspections are more important than ever. This allows you to find property damages that your tenant may need to pay for or other issues you need to address to maintain habitability.
Inspections typically happen every three months, and you need to provide your tenants with proper notice. Being present during the inspection would be better, since it shows your tenants that you care enough to check in person.
What Are the Potential Downsides of Being an Out-of-State Landlord?
- You will have limited oversight of your property. Since you’re not in the same city or state as your rental property, you can’t ensure that tenants are following your lease rules.
- Your response to emergencies may be delayed. Some emergencies need to be addressed in person, and if so, tenants will have to wait for you to arrive. The quickness of your response will depend on how far you are.
- You’ll have no choice but to rely on third parties. You’ll have to put someone in charge while you’re away, which means you won’t be 100 percent sure that your tenants and your investment property are taken care of.
- There will be an increased risk of property neglect. Without someone watching the property in person, small issues will go unnoticed and can worsen.
- You can’t build relationships with your tenants. Since you’re not on site, you won’t be as close to your tenants, which means they’ll likely choose not to come to you with issues about your property or the current management.
Out-of-State Landlord FAQs
Is it possible to manage a rental property from another state?
- Yes, it’s possible with the right systems in place, such as hiring a reliable property manager, using property management software, and setting up efficient communication and payment channels.
Should I hire a property manager for an out-of-state rental?
- Hiring a property manager is often the best option, as they can handle daily operations like leasing, inspections, maintenance, and lease enforcement on your behalf.
Can I manage an out-of-state rental without a property manager?
- Yes, but it can be challenging. You’ll need dependable local contacts, strong automation tools, and clear procedures to ensure your property is properly maintained and tenants are supported.
How does property management software help out-of-state landlords?
- Property management software helps automate rent collection, maintenance requests, lease renewals, and accounting, making remote management more efficient and less time-consuming.
How often should out-of-state landlords conduct property inspections?
- Inspections are typically done every three months, with proper tenant notice. Being present when possible helps show involvement and allows issues to be addressed early.
Don’t Leave Your Investment Property Unattended
There’s only so much a landlord can do when they’re managing properties out of state, but luckily for you, there’s a solution to that. Hiring employees or property managers can help you keep an eye on your rental business better.
Response will be quicker, operations will be smoother, and your rental business will be more profitable. For a reliable service, you can count on ES Property Management. We can make sure that your investment is taken care of in your absence.
Contact us, and we can talk about what you need.
