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How To Effectively Manage Your Rentals From Anywhere On Earth

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  • How To Effectively Manage Your Rentals From Anywhere On Earth

    Courtesy Of Retipster

    The world gets smaller every day.

    It’s a world where more than one in three buyers make offers sight-unseen and where virtual tours are quickly escalating from photos to videos to immersive virtual reality walk-throughs.

    Investors buy rental properties for passive income (among other advantages). The purpose of passive income? To de-couple your income from your job and all the freedom that entails.

    That freedom doesn’t end with all the extra time you’ll have. It also means you’re no longer tied to one place physically for your income.

    You can literally live anywhere in the world and enjoy your rental income … if you set up your rental management thoughtfully.

    Case in point: I live in Abu Dhabi, while my rentals are in Baltimore!

    The obvious solution is to hire a local property manager. It’s a viable option, if an expensive one.

    But what if you don’t want to lose 10-15% of your rental income (including tenant placement fees) to a property manager?

    Here’s exactly how to manage your own rentals from anywhere in the world. From Vacancy

    It’s easy enough to post photos and rental listings online: Craigslist, Postlets, HotPads, and the like.

    The harder part? Physically showing the property to prospects.

    First, put together an FAQ document about the property. Cover every question you can think of: parking details, average utility costs, pet policies, whether anything is included with the rent, et cetera.

    As applications roll into your inbox, send boilerplate response emails that include a link to this FAQ document (Google Docs is ideal for this).

    Include the details of when the open house will be held.

    This, of course, requires someone to physically be present at the property. It could be a friend or family member, or you could hire a property manager as a one-time leasing agent and pay them a month’s rent as a placement fee.

    Pro Tip: Even if you don’t know anyone beyond your contractors in this city, they can almost certainly help you find someone cheap to hold the open house. Perhaps they have a 20-year-old nephew looking for a little extra cash? Tenant Screening

    This is easier than ever before to do from anywhere.

    Start by collecting electronic rental applications that can be e-signed and emailed back to you. (Need one? Here’s a free rental application that you can email back and forth.)

    Next, run credit, criminal, and eviction reports. There are plenty of websites online that offer this, and many let you charge the fee directly to the applicant.

    This is perfect because then you don’t have to hassle with collecting application fees.

    Next, call your shortlisted applicants’ employers. Verify the income they stated on their rental application as well as their chances for continued employment. If possible, get a sense from their direct supervisor about how responsible and reliable they are.

    Finally, call their current and prior landlords to learn as much as possible about their housing history.

    Pro Tip: If you live overseas, use Skype’s Unlimited US calling service – I use it, and it's affordable ataround $5/month. Leasing & Move-In

    Collect the first month’s rent, last month’s rent (if allowed), and security deposit electronically. PayPal, Venmo, or online rent collection services are all viable options.

    Use a (state-specific!) lease agreement package with e-signatures, or import the document to DocuSign.

    The only piece of this puzzle that you need boots on the ground for is the move-in condition inspection. Make sure this document is included with your lease package, and have your local agent take timestamped photos!

    Pro Tip: Negotiate the move-in condition inspection to be included with the fee for whoever’s hosting your open house. The Easy Part: Collecting Rents

    You have dozens of options for collecting rent electronically.

    Basic options include PayPal and Venmo. While it galls me to promote a competitor of mine, Cozy is a popular option among mom-and-pop landlords.

    Pro Tip: If you want true rent automation, you can deduct the rent directly from the tenant’s paycheck. It’s a service my company offers. Ongoing Communication

    Landlords who live out-of-state or overseas often forget to do this, but it’s crucial for your success as a physically-absent – but not absentee! – landlord.

    Contact your tenants every three months, if you don’t hear from them regularly. Just check in, as a reminder that you’re there and that your take your job of managing the rental seriously.

    You can check to make sure there are no leaks or other damage-inducing maintenance problems and ask about news around the neighborhood. Even asking about their family and jobs is a nice gesture that helps reinforce your relationship as mutually beneficial, rather than adversarial.

    Pro Tip: Have your go-to local conduct property inspections at least once a year (preferably twice) to check on how the tenants are treating the property. Have them look for signs of unauthorized pets, unauthorized occupants, and any other lease violations. Maintenance & Repairs

    No matter whether you live next-door or on another continent, this fact remains the same: You need a small army of trusted local contractors to help you manage your rentals.

    You need low-cost handymen to handle minor repairs and regular maintenance. You’ll need specialists, like HVAC contractors, roofers, plumbers, electricians, and the like.

    You’ll even need a local maid service for clean-outs.

    The closer relationship you have with these contractors, the better off you’ll be as a long-distance landlord. These contractors can be your eyes and ears at the property.

    Make sure to get several quotes, since it will be extra tempting for some contractors to inflate their quote if they know you’re not local and can’t see the property yourself.

    Pro Tip: Try to develop an especially close relationship with your low-cost, well-rounded handyman. They are your first line of defense when something goes awry at your properties. Evictions

    Evictions are a nightmare at the best of times. When you’re managing rentals long-distance, they’re especially trying.

    You’ll need to hire a local service to handle evictions for you if your tenants stop paying the rent or otherwise break your lease agreement. One option is Nationwide Eviction – they can serve the eviction warning notices on your renters, appear on your behalf in court, and handle other essential eviction-related tasks.

    Many states and cities have local companies that offer these services as well. The trick is to have one lined up before you actually need it.

    As a long-distance landlord, it’s crucial you serve eviction notices and file for eviction immediately when rents are late. It sends a loud, clear message to your renters: You enforce your lease agreement withzero tolerance for breaches.

    Pro Tip: Include a clause in your lease agreement that eviction-related costs will be billed to the tenant. This way, you don’t come out of pocket for the cost of hiring an eviction service. Move-Out Inspections

    Who you gonna call?

    Your go-to person for boots on the ground, of course. A friend, family member, contractor’s relative, or leasing agent; ideally, you want to use the same person who showed the property originally, and performed the move-in inspection.

    Speaking of which, make sure they have a copy of the move-in inspection and the photos from it.

    One idea you might consider is having them do an unofficial walk-through a few days before the tenants move out. They can then point out to the tenants exactly what they need to do, if they want to receive their full security deposit refund.

    They can then come back a few days later for the formal move-out inspection.

    Pro Tip: Within a week or two, this same person will be handling the open house and move-in inspection for you, right? Negotiate all of these services as part of one “turnover service” fee. While you’re at it, have them come and verify that any repairs or updates performed by contractors during the turnover were completed well. Turnover: Full Circle

    When your local helper does the move-out inspection, get the low-down on what kind of work is needed. Send your handyman over to repaint if necessary. Make any other updates or repairs, to attract the best quality tenants for your neighborhood.

    Since your property is tenant-proof, you don’t need to replace the carpets, right?

    The hardest part of managing rentals long-distance is turnovers. Do what you can to minimize them and retain your good tenants long-term.

    As a final note, if you own your rentals under an LLC or other legal entity and you don’t live in that state, you’ll need an in-state resident agent. There are services you can hire to meet this need, who will forward mail and notices to you. Expect to pay $100-$300/year for these.

    Or, of course, you can negotiate that as part of the services performed by your go-to local helper.

    And one last Pro Tip! Use photos from the previous vacancy to advertise the unit in advance. Be sure to get photos of this vacancy as well, for next time.
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