Long Distance Landlording - Thoughts?

9 Replies

When I was in college, I rented a house with my roommate in upstate New York.  My landlord would fly to Florida from the months of November to March to avoid the cold.  I would mail him the rent every month.  If we had problems with the property, I would call/message him and he would call the repairman to fix it.  We never had issues with this process.  I didn't think about the logistics or the boldness of this method when I was a young 22yr old.  But now, as a landlord with several properties, it got me thinking...what if I was a more difficult tenant?  How can you manage a long distance property without a property manager?  So I wanted people's opinions about this.

What are your thoughts about renting your property from long distance without using a property manager?  What would you do if your tenant loses the keys and you're not around to give them a spare?   Do you hire someone to hold a spare key?

What kind of responsibility do we have to our tenants to fix things when they're not home?  

Is there any legal issues with not being near your rental properties without a designated property manager?

What other concerns are there that I haven't addressed (and I know there are many!)?

Thanks!

I do that now. Still within the state but still a fair distance away by car.

I automate everything I can. All issues I can think of can be handled with a phone call. However, I also have a trusted handyman in the area so he would be the one to handle issues like a tenant locking them self out.

To put it simply, without a property manager , I would need to have boots on the ground to handle certain things.

@Ralph Miller , same here. I live in CA and most of my doors are in upstate NY. Totally agree with @Joshua Diaz on automation. We have a GC I can call and get most things done plus a couple plumbers, roofers, painters, etc. I have also had to call emergency skilled trades on occasion but even with that cost my returns are better than I could ever get locally. My wife is our property manager. These days most of our tenants pay rent online and are more than happy to just text issues so she handles most of it without even having to talk with them. The one thing I make sure to do, though, is to block out a week at the property after closing to rehab any empty apartments with my GC. That way I have a good understanding of the layout, utilities, condition of everything. If the building is fully occupied (which is rare with my strategy), I make sure to be there for the inspection to get access to all the corners of the building.

To answer you specific questions:

  • We have had difficult tenants for sure. I think in the end we end up having to tolerate more because I can't pop over and ask for rent or fix something NOW. If you screen well and keep the place fixed up the probability goes way down for this happening, though.
  • My GC has keys for every unit and would make copies for the tenants (for a fee, of course).
  • I always get permission from the tenants to go into the unit ahead of time. If possible, I request that they are there to meet the contractor. This not only frees me up from having to pay another person to do it, it gives the tenant piece of mind that nothing of theirs got touched or taken.
  • I have not had any specific legal issues, but do have a lawyer and a network of large umbrella insurance policies just in case something happens. For SFH the lease states tenants are responsible for keeping the sidewalks and yards neat and clean. For MFH we contract a landscaper to handle.
  • The main concern is that by not being local issues can go a long time without being fixed and you might not know until you need to rent the unit or get a letter from the city about the state of your yard. I actively work to head this off by traveling back east once a quarter or so and checking in on everyone plus I try to do yearly inspections. This isn't the cheapest way to handle but I feel it is effective and just the cost of doing business.
  • Another possible issue is that the neighborhood starts to turn one way or the other and you don't know it. You could miss an opportunity to double down on investing there or sell off before things get bad. Making a trip back to check things out helps address this as well. 

Hi @Ralph Miller ,

Most of the answers to your questions is answered by just defining responsibility in your lease. 

Our company provides tenants with keys and other access devices. If they lose them, it is their responsibility to replace them. (stated in the lease) We do not get paid to run the keys over to the property, nor can we give them our copy of the keys because what if they don't return them? It's simply a liability issue. 

I always recommend hiring a pro to rent out your unit. Their fee should include marketing, showing, screening, the lease, money collecting and move in. Doesn't mean they manage the unit, just procures the tenant. I'm in Florida, and I rented out a unit to a lady in California, who self manages her property, 

We educate with our tenants how repairs are handled. You call, text, email or submit a repair online, we contact our person/company that handles the repair to then reach out to the tenant to co-ordinate their visit. If they cannot be there for it, we can provide access with their permission. Start relationships with a handyman, AC company, plumber, etc that work with property managers and landlords that have an idea of how to handle things. Hire the pro to rent out your property, and ask them for their contacts. 

In our leases, we include language that allows us to do 6 months inspections and AC servicing, which they must agree to. That allows you to visit the property, check for leaking toilets, and deferred maintenance issues that could lead to bigger problems down the road. Approach it with their approval, and if they're difficult, give them the required noticed that expressed in your lease and open the door yourself. 

Best of luck!

@Ralph Miller

I started an investor focused property management company. I believe if you run the property management correctly, you can get all management fees paid for in the differences in lost productivity when you self manage.

If you are only leasing, a real estate firm has less interest in marketing your property early (while the tenants still occupy the property) and tightly screening an applicant.  A property management company is aligned with you because like you they do not want to deal with the day to day headaches of the tenant.  By leasing a property while it is still occupied, we average over 2 weeks less vacancy period (and frequently do 0 day turns).

Since we own a lot of the units we manage, we also are aligned with you in vendor costs and quality. 

Since we are proactive in our response to tenants (24/7 response), quick maintenance, etc, our tenants are happier and stay longer (you pay less leasing).

We also set up our leases to be in the best months where tenants are renting (May through August in our market because of schools and weather).  This allows us to get top dollar (it also makes our job that much harder since our leases are stacked).

I haven't even included the piece of mind you get and everything else. Partnering with the right company is like buying a REIT but also getting the price appreciation after.

You have two great answers, from Will and Samuel already.  I would add one more layer here. I manage my own rentals and have done so from another state for 20 years.  I travel once a quarter to do inspections.  But I use software for the property management tasks.  It allows my tenants to have an individual portal where they can see their documents, statements, and make rent payments.  Their payments are recorded so no receipts are required. There is also a running account history that they can view.  If they have something they need to tell me, they use the message center.  It has solved all of my problems with long distance management.  I can advertise my upcoming vacancies and use the tenant screening tools built in.  Then, if I am not going to be at the property, I hire a real estate agent to show the property.  My leases are sent via email and esigned by all tenants who are 18 or older and me.  Then they are stored in the document section of the tenant portal and my side of the software.  The new tenant pays the deposit, fees and rent through the portal which I invite them to.  It is very inexpensive for my 5 units that I still own.  It costs me $30 per month average.  I handle my repairs through the software as well.  My contractors are invited and I send the work orders to them for bids through the software.  When the work is done they bill me through my software.  

But if you decide to use local property management, try to get one like Samuel who is doing an amazing job of helping his owners maximize their profit.  I would still travel quarterly to the properties to do inspections and be sure that they are up to your standards.

Thanks for the replies and the input!  Very helpful!  I've decided to try to manage one property myself from long distance and to see how that goes.  My other property is being managed by a property manager and, I must say, having a property manager definitely does remove lots of the stress and headache of having to deal with tenant problems.  But i'll do a trial run of managing a property myself long distance and see if saving on the management fee is worth it!  Thanks again!