When most people think about absentee landlords, the stigma isn’t great. It drums up an image of a slimy slumlord who takes money and doesn’t ever show his face. However, that’s not the case with the landlords who put their best foot forward and make a continued effort to do a good job, even when they live offsite.
It’s better to think of an offsite landlord as a great investor. Investing in housing markets in other cities, states, or even countries in order to turn a good investment is a smart idea, and many people choose to do that over investing in a nearby location. Once they land a property and rent it out, it’s up to them to manage it. Many investors choose to take the absentee landlord approach, in which they handle all of the managerial work from afar.
This approach is definitely cheaper than hiring someone on-site to manage the property. However it isn’t for everyone. There are a lot of challenges that come with taking care of a major business operation. Handling rent payments, maintenance requests, tenant move-in and move-out processes, evictions, and more is more challenging than many people realize. You might think you’ve got what it takes to be an absentee landlord, but here are a few things to consider.
Handling Managerial Work from Afar
The earned potential of running a rental property draws in a lot of investors, but many find that they’re not cut out to handle the managerial work. There are many complexities involved that you’ll need to be prepared for if you want to get involved as an absentee landlord. Here are a few challenges to consider before getting started.
• Rent Processing:
If you purchase rent-processing software, this is easy. Your tenants can send you the payments every month, and the program can even send an alert when someone is late or hasn’t paid. If you don’t want to pay for software, you have to rely on standard mail, which gets tricky. It’s not uncommon for checks to get lost, plus it’s a timely process.
• Move-In and Move-Out Processes:
You have two options here: Hire someone to handle checkouts and check-ins, or travel to the rental property for each one. The latter isn’t an option for most people, so you’ll have to find someone you trust to be your eyes and ears during the move-in and out processes.
• Maintenance Orders:
Experienced landlords know that maintenance requests take up a lot of time and energy. If you hire someone to handle it, they’ll charge exorbitant fees. Besides that, you won’t be able to see the problem for yourself and make sure the tenant isn’t taking advantage of you.
• Tenant Screening: Making sure your tenants are trustworthy is difficult to do from afar. Anybody can look good on paper, but if you can’t meet them in person, it’ll be difficult to determine if they’re a good fit for your property.
These are just a few of the many challenges you’ll face as an absentee landlord. You’ll likely encounter more when you get into the business.
Necessary Personality Traits
Some people are up to the challenge of being an absentee landlord, even though this concept would cripple others. Those who can handle the situation have the following traits:
• Not Busy: This trait is as important as it is rare. Long-distance landlords must be able to commit to such a time-consuming endeavor. Those who work full-time will have difficulty managing their rental properties and their work and home lives. If you’re going to be an offsite landlord, it’s important to treat it like a full-time job.
• Go-Getter: This job requires choosing your own hours and being motivated enough to get things done. You’ll need a positive attitude and a plan for constantly improving efficiencies and boosting productivity.
• Disciplined: Since you have the power to choose your own hours, you have to be able to use them wisely. Being an effective landlord means doing things now instead of putting them off until the last minute, or choosing to go out with friends or family rather than accomplishing work. Otherwise, your tenants can easily cheat you, and you’ll have a hard time making a profit.
• A Strong Network: This isn’t so much a personality trait as it is a useful bonus. Having a powerful network of people and companies you can trust to accomplish the work is priceless for long-distance landlords.
• Organization: Want to earn your tenants trust and respect, even if they can’t see you? Have all the documents ready to sign and the contract ready to go. You’ll also want to have the move-in and out processes down to a science, so it will be comfortable and simple for your new tenants. Showcasing your organizational skills is essential for non-present landlording.
• Reliability: You must be available to answer phone calls, emails, maintenance requests, and all other forms of communication. You can’t expect your tenants to respect you and your property, and adhere to their end of the contract, if you aren’t keeping up with yours.
• Honesty: It’s easier to get away with dishonesty when you’re farther away. At least that’s what your tenant will assume. Show them that you’re honest and trustworthy by adhering to your end of the contract, communicating clearly, talking comfortably about problems, and correcting issues as soon as possible.
• Communication: Be friendly, yet firm when communicating with tenants. You need them to know that you’re willing to listen to their concerns, but not willing to let them walk all over you. Furthermore, keep up a steady stream of communication through emails, social media, phone calls, and even SMS messaging. You may be living hundreds of miles from where your tenants live, but they don’t need to feel like you are.
If You Aren’t Ready, Green Residential Is!
As you can see, there’s a lot of discipline and organization that goes into managing a property from afar. Not everyone is ready for that kind of commitment, but that doesn’t mean you should cancel your investment. It simply means you need a hands-on property management company like Green Residential to handle it for you.
We service the entire Houston area, managing all aspects of property management, including maintenance requests, tenant screening, move-in and move-out processes, eviction notices, landscaping, and more. We’ll be able to serve as a strong, trustworthy presence when you can’t be there. For more information about the services we provide, contact us today!