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There are many reasons why someone might want to or need to manage their properties remotely. Some people for example, and you may be among them, might have decided to invest out of town, out of state, or even out of the country. Often this makes good financial sense as other locations offer new and investment opportunities, lower tax rates, and fewer fees which may be hard to pass up.
The problem, however, is that being distant from your properties, whether it’s for a short time or a long time can, if not managed properly cause issues in the smooth operations and day-to-day running of an investment property, and this in turn can quickly begin to affect your bottom line.
Whatever the reason is that you can’t personally be there, you need to have a system in place to ensure that your property is managed efficiently and professionally so that rent comes in on time, maintenance requests are managed, and when the tenancy ends a new, a quality tenant is found swiftly.
For some people, this would be all about hiring the right property management company, and for some, this is a good choice. However, whilst this certainly does make things simpler for the landlord it comes with several downsides.
There are a number of factors that should influence your decision as to whether a property management company is right for you when managing your properties remotely. Below we outline three major considerations.
Right off the bat, a property management company is going to cost you. And they’re expensive, as a baseline, expect to pay a typical residential property management firm between 8 – 12% of the monthly rental value of the property, plus expenses. For a property renting out at $2,000 a month that’s a whopping $200+ a month.
Property management teams don’t have tens of thousands invested in a property, you do. What this boils down to then is that you are more likely to want to take better care of a property and be more attentive to tenants. This might lead to more small maintenance jobs in the short term, but it will also likely mean you avoid the large unexpected maintenance costs that crop up when a property is neglected.
Along the same lines as the previous point, who’s going to be more demanding when selecting a tenant? The person with skin in the game? Or the people who don’t get paid until they fill the vacancy? When it comes to selecting tenants property management teams often (not always) try to select someone quickly which can lead to a drop in tenant quality and increased risk.
If you’re in a different timezone it might be wise to appoint someone as a local agent. They would deal with things like routine property inspections and emergencies during those hours you are necessarily asleep.
You need trustworthy maintenance people who you can call and send over if needed. Someone to do hands-on jobs.
To ensure that rent is paid in time and in full every month even if you aren’t there to collect it in person you want to set up a form of digital payment.
You can now collect rent online with Landlord Studio. It’s a fast, secure, and affordable method for collecting online payments. With Landlord Studio, tenants can set up recurring payments, and income is automatically tracked in our income tracker. An essential tool for managing properties remotely.
Have a look at our article on the best ways to collect rent from your tenants.
You can automate rent reminders with the landlord studio and create templates for tenants for routine email communications such as property inspections, or a welcome letter.
For all other interactions with your tenants, you need to have a good line of communication open. Make it clear to your tenant how you expect to communicate with them ie. over email, via text, over the phone, or via a particular communications app.
Whether you manage a property that’s right next door or you manage one all the way across the country keeping your books up to date by using innovative software like Landlord Studio will save you hours every month and even more when it comes time to file your tax return.
To this end, and at user request we developed a specific report for US landlords called our Schedule E report which makes tax time a breeze.
Having a thorough screening process will help you avoid nightmare tenants and if it’s done right it’s perfectly possible to be a landlord and never have to go through an eviction process.
Running your tenant screening when you’re not around is a little more of a challenge, however, it’s definitely doable. You can read more about how to screen tenants here.
Run Tenant Screening Reports in The Landlord Studio App
It is always best to do your showings in person as this allows you to meet your prospective tenants face to face. If you can’t be there though, then make sure to appoint someone you trust and talk to all potential tenants over the phone.
Find out about Rental Listings with Landlord Studio
Not all landlords allow subletting but for those that do make sure you have a clear policy in the lease. On top of this, you will want to have the final say over any sub-tenants that move into the property by running them through your screening process.
Make your own customized lease document.
Thankfully online document signing is a thing, this makes it easy and efficient for landlords and tenants to e-sign important documents like the lease agreement. This is a feature that we aim to add to Landlord Studio in the future. For now, we recommend landlords and tenants use software like Adobe PDF to e-sign legal documents.
There may come a time when you wish to raise or even lower the rent. Having a formal rent change letter that you can send over email will make this process smooth and manageable. So, once again make sure you have clear lines of communication open.
Installing a security system can give both you and your tenants extra security at your rental property especially if you are managing your rental from afar. Home security systems are effective deterrents for preventing break-ins and vandalism, and you can use them to monitor any properties which might be vacant.
There’s more to a home security system than just cameras, too. Carbon monoxide detectors with digital alerts and smart door locks with digital keys are often included in modern systems, providing convenient safety features for landlords.
It’s perfectly possible t manage a rental property remotely as long as you are prepared and have both the right property management software and the right team behind you.
Managing your properties yourself with the right system is efficient and perhaps most importantly a damn sight more affordable than using a property management agency. Plus, with a system like Landlord Studio, you can gain detailed and nuanced insights into your portfolio’s finances allowing you to easily identify weaknesses and opportunities for growth.
As a final note, even when managing your rental property remotely you will want to ensure that regular property inspections are carried out. If you can’t carry these out in person make sure you have someone you trust do so for you. They should take pictures as evidence of any damage or maintenance issues.
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