The world is flat.
You can live and work from anywhere in today’s digitized, interconnected world. My business is 100 percent remote—we have people in Pennsylvania, Pakistan, Texas, and Abu Dhabi (the latter is me!).
And as a landlord, the old geographic ties binding you to your rental properties have broken. It’s easier than ever to manage your rental properties remotely without sacrificing on returns.
Here’s how I live overseas, while managing rental properties in Baltimore.
First Things First: You Don’t Need a Property Manager
Don’t get me wrong, property managers have their uses. In fact, I use one for my lower-end rental properties, that come with greater aggravations.
But they’re expensive. Don’t kid yourself into thinking they only cost the 8% that they advertise; most property managers also charge leasing fees (often a full month’s rent), and some less-scrupulous managers find all sorts of nickel-and-dime-you-to-death fees to slip into the contract.
I had a terrible property manager a few years back, who charged for every visit to the property, every service call to a contractor, every lease renewal. They even charged for vacancies, removing the incentive to keep the property occupied. All on top of 8% rent collection fee and a one-month leasing fee.
If you use a property manager currently, double check exactly what fees they charge. I wouldn’t use anyone who charges fees beyond ongoing rent collection and new tenant leasing fees.
In fact, you should consider saving yourself the 10-15% that property managers end up costing once you include leasing fees, and manage the properties yourself.
The Local Help that You DO Need
While you may not need a full-service property manager, you still need some local help. Some boots on the ground. We live in a physical world, and you’re leasing a physical location.
Here are the three types of local support personnel you need:
1.A Leasing Representative
Someone needs to show vacant properties for you. Sure, you could use a smart lock and allow prospects in to view vacant properties for themselves.
But it’s poor marketing and sales. A bad user experience, if you will.
So, you need someone to show vacant properties, someone personable who can bring a level of charm when showing the unit. This person could be a professional property manager, that you hire solely as a leasing agent to fill vacant properties. You’ll still end up paying them a month’s rent as a fee, but turnovers and vacancies are the most labor-intensive part of managing a rental. The headaches are worth outsourcing.
It doesn’t have to be a pro, though. It could be your niece, your friend’s little brother, a college student looking for some extra cash, a neighbor, even another tenant of yours.
There’s one other task your leasing rep needs to do for you: they need to do move-out and move-in walk-through inspections with outgoing and incoming tenants. When you negotiate the fee with your leasing rep, include these tasks in it.
2. An Eviction Representative
If you screen your tenants thoroughly and manage them well, you won’t need an eviction rep often, if at all.
But you still need one on standby, just in case.
An eviction rep will serve eviction notices on badly-behaved tenants and appear on your behalf at eviction hearings. In most metropolitan markets and many non-metro areas, you should be able to find eviction services ready and able to take these headaches on for you.
3. Contractors of All Skill Levels & Specialties
The other people you need available locally are contractors.
You need specialist contractors who work with HVAC, plumbing, electrical, roofs, basements, and so on. Even more importantly, you need a couple cheap, versatile handymen, who can quickly and affordably tackle all the little problems that pop up. Leaking S-bends, worn-out toilet flanges, repainting—you know the drill.
Ideally, you want to build relationships with these contractors over time. My primary contractor is extremely versatile, and he has keys to my properties.
With a single phone call, you can mobilize your contractors and resolve the problem.
Speaking of phone calls, you’ll also need ways of communicating with tenants, leasing reps, contractors, and so on. This can be especially tricky if you live overseas.
Anonymous Phone Number
I don’t like to give tenants my personal cell phone number.
Instead, I use an anonymous number from Google Voice. That phone number is then routed to my Skype account. It’s worth mentioning that you don’t have to make this as complicated as I did—you can just buy an anonymous Skype phone number directly rather than going through Google Voice. (I wanted to preserve an old phone number, hence the extra step of Google Voice.)
Tenants call me, and it rings on my Skype, both on my laptop and on my phone. Their caller ID still appears, and I know who’s calling, but I don’t have to give them my personal cell phone number.
Living overseas, I need a cheap way to call the U.S. After all, my business is in the U.S., and all of my family lives there.
Fortunately, Skype offers an unlimited calling plan, for people living overseas to call the U.S. I pay around $6/month for it.
But Skype also offers anonymous U.S. phone numbers, for you to give out to tenants.
Related: The Core 4 Members Vital to a Profitable Long-Distance Real Estate Investing Team
Our online landlord app is actually preparing to launch an anonymous phone line service for landlords that automatically tracks and records all phone calls and voicemails for later reference.
I also don’t like to give tenants my personal email or my work email.
Instead, spend two minutes creating a free email and setting up forwarding to your primary email.
As a side benefit, all tenant email exchanges will be centrally located on that one email account, for easy reference.
I’ve had tenants show up at my door at 9:00 at night before—when I had a date over, three-quarters of the way through a bottle of wine.
You don’t want that.
Spend a few bucks on a P.O. box or a private mail service. They can sign for packages and either forward mail to you or open and scan it for you to access online.
I use St. Brendan’s Isle out of Florida and have been mostly happy with them.
Online Property Management Automation
So, you have your boots on the ground and you have your communication channels in place. What about automated property management?
Online Rental Listings
This one is easy. You list your properties for rent online through a service that syndicates it to several popular platforms.
The only tricky thing is photos since you can’t just pop by the property to take photos yourself. Make sure you have a good set of photos of each rental unit, either vacant or staged, that you can post in future rental listings.
In a worst-case scenario, your leasing rep can take fresh photos for you, or you can hire a professional real estate photographer.
Rental Application & Tenant Screening Reports
Another easy one.
All you have to do is enter the applicant’s name and email address, select which reports you want, and select who should be charged for them. Obviously, our online landlord app offers this, but there are other services that offer it too.
The applicant gets an email alert, they fill out their information, and you get everything delivered to your email inbox. Easy peasy.
Lease with Digital Signature
In good online landlord automation platforms, once you select an applicant you like, it automatically imports their information into a lease for you. Ideally, you then click a button to digitally sign it, and the tenant can do the same.
But even if you use an old-school Word lease, you can still use third-party digital signature services. No ink or snail mail required.
Automated Rent Collection
I never want to hear the line “check’s in the mail” again.
What I want is for my rent to just show up in my bank account every month, which, fortunately, is also extremely easy.
Take five minutes to set up online rent collection, whether through our landlord app or another service of your choice. Then you never have to worry about paper checks, cash, deposits, or any other 20th Century rent headaches again.
As a bonus, good online rent collection systems also have integrating accounting, for instant income and expense reports, and instant Schedule E tax reports.
If you want to live overseas like I do, you’ll also need to a way to access money easily.
- A U.S. bank account to receive rents electronically (as outlined above)
- A (hopefully free) bill pay service with that account, for the rare instance when you need to send a paper check
- A linked credit card, with no foreign transaction fees
- A way to transfer money cheaply overseas
You may also want a linked brokerage account, that you can easily move money back and forth from your checking accounts.
After all, you may want to invest in more than just real estate!
Flat… and Shrinking
The world is flat, but it’s also shrinking.
Increasingly, real estate investors are spreading beyond their own market, to invest in out-of-state or overseas markets. According to one study from Redfin, the percentage of sight-unseen real estate purchases leapt from 19% in mid-2016 to nearly double that rate, 35%, only 16 months later.
Real estate investors and landlords are no longer tethered to their home cities. Start working towards financial independence, and you can truly live and manage your rental properties from anywhere in the world.
And send me a message at any time. I’m happy to share what it’s like being an overseas landlord!
Do you own any long-distance rental properties? What have you done to successfully manage them from afar?