So you've got one property you'd like to rent out while living somewhere else or traveling continually, or perhaps you have a small handful of properties located in different areas. Under the right circumstances, you can handle all of your landlord duties and managing properties remotely.
This guide shouldn't be considered a substitute for the expert advice of a qualified landlord-tenant law specialist or an area property manager, but it will help you to shift basic regular duties to the internet and also automate them to a great degree.
Just keep in mind that this advice is only for those who own one property, or a small handful of scattered properties. If you own more than five properties or so, or you own multiple units in the same building, it is going to be both wiser and more economical to simply hire a property management company in your area to get you a good rent estimate, handle day-to-day operations and maintain a physical presence to prevent you from going completely crazy.
It is also important to keep in mind that laws vary between individual states and cities regarding whether any licenses or certifications are needed to lease or rent out a property, and whether there is a requirement for the landlord to be present at the property for a certain percentage of each year if they intend to rent units on a short-term basis. The hotter a housing market is, the more likely the laws are to be complex and restrictive as regards to short-term rentals.
Payments and Mail
When formulating a strategy for payment acceptance, keep in mind that some states require specifically that a written receipt be provided to the tenant upon request, and just about all require that a physical address be provided for payment. Most states do not allow you to force a tenant to use electronic means to pay or to use a credit or debit card; however, some states allow landlords and tenants to mutually agree to electronic payments if the language is included in the lease. This is one area where it is important to know what the applicable laws are in your state, county and city. And while you usually can't mandate that a tenant set up automatic bill pay through their own bank account, you can always incentivize them to by offering a discount for it or some sort of benefit
If you're remote but simply living in a location not far away, this isn't really a problem as there is no issue with having tenants mail payments to you. If you live outside the area or outside the country in a fixed location, you can rent a local privately-owned mailbox that offers a mail forwarding service. If local laws stipulate that you provide a physical drop-off point for payments, you may need to employ an agent or property manager if you don't have family or friends in the area who can handle it for you. A trusted handyman can potentially pull double duty in this area.
If you're traveling while acting as a landlord and need to collect a physical check or money order, things get a bit more complicated, but handling paper payments is still quite manageable. One option is to sign up for a mail forwarding service that opens your mail and scans it, then sends you the images of it. You can combine this with a bank account that allows you to make deposits using the image of a check or money order. The largest service of this nature is Earth Class Mail which also offers forwarding of physical mail.
Some landlords who travel or live outside the country will send pre-printed bank deposit slips to their tenants. Unless you know the tenant personally and have absolute trust in them, this is a very risky thing to do. Giving them deposit slips gives them your account and routing numbers, which a scammer can use to gain access and make withdrawals.
The easiest way around all of this would be to use some sort of an online software for collecting rent payments, even if you live near the property(s) you manage.
Marketing Your Properties to Fill Vacancies Quickly
For all Landlords, time is money when it comes to keeping your property from being vacant. The faster you can get your property filled, the better your ROI is, and the less stress you will have.
In order to fill your property faster, you need to make sure you are advertising your rental property where prospective renters are searching for their next home. With tenants relying more and more on digital search to do this, it means that you should know where to be marketing your rental property online. The more eyeballs you get on your property, the more applications you will get, leading to minimal vacancy rates.
You also shouldn’t ignore the simple “For Rent” sign in the yard, when possible. If your unit is on a street with a decent amount of traffic, this will get a lot of local exposure and lead to more inquiries itself from people who might be looking for a place to rent in the area for themselves or even for a friend or family member.
If you are not able to market the property yourself and find a renter, you can always consider hiring a local property manager who offers a “leasing-only” service. They will be able to market the property and find you a renter, but you don’t have to retain them for monthly property management services.
Preventing Late Payments, Non-Payment and Evictions
Communication with tenants is more important than ever when you are not physically present at the location. Resolving a payment dispute interpersonally is always much, much simpler than having to initiate legal action.
An ounce of prevention is also worth a pound of cure in this area in terms of careful tenant screening for reliable tenants with good sources of income and long histories of paying rent on time. Credit, reference and background checks can all be handled remotely.
If it does come down to eviction proceedings, some basic steps can be handled by mail. Sending a certified letter as a formal notice of eviction is actually the preferred way of doing it, as it provides proof of receipt. A number of state and city government websites also now allow you to file required paperwork online.
A local attorney can be contracted out to handle evictions on a one-time basis if necessary. A realtor or property management company may also offer this service as a one-time sideline without having to retain them on an ongoing basis, and will likely be significantly cheaper than hiring an attorney. Local law enforcement can physically evict a tenant who refuses to leave once you have a judgment against them.
Disposition and storage of abandoned items are areas that vary greatly by state and will require careful attention. Some states require that you store an evicted tenant's property for some amount of time, but you can bill them for the storage. If the property has to be handled, this will likely be another task for your local handyman.
Having a trusted handyman on at least a part-time contractual basis is a virtually mandatory business expense for a remote landlord who isn't using a property management service. You definitely want to compile a list of good contractors for emergency and major repairs to keep on hand, and you can call these contractors on a one-time basis as needed in most cases.
You will need someone local to coordinate access with these entities if the tenants are not in at the time of the service, however. They can also potentially provide general services like picking up mail, providing a local point of contact for tenants, checking on the property if a tenant goes missing and cleaning out tenant property if they quit the lease or are evicted.
If you do not yet have a property but are thinking about investing in one, a "turn-key" package that bundles in maintenance through a general contractor might be worth the added expense.
Even on a part-time basis, a handyman can represent a significant business expense. Many landlords have great success in controlling expenses by offering a regular handyman one of their units to live rent-free as either a significant chunk or all of their compensation. If you are a licensed real estate broker and your handyman is interested in becoming one, another way to negotiate a significantly lower rate is to offer to help the handyman get their own real estate license through your brokerage.
One final point is to consider installing a keyless entry system that you have remote access to over the internet, as lost keys or lock issues will likely make up the bulk of maintenance calls.
The only big question in cleaning is whether to hire services on a one-off basis as the need arises, or to contract out with one and negotiate a better rate if you have an ongoing need. The best price will likely come by hiring a small independent service on a long-term basis, but if you only have one or two properties that you expect to be occupied by long-term tenants, it's probably more cost-effective to simply hire cleaning companies as needed and look for good reputations paired with promotional rates when you do.
Managing your properties without a formal property management service can represent a major saving, but the stars do have to somewhat align for you in terms of finding a reliable regular handyman at a reasonable cost and not having state laws and local regulations that are too restrictive to make full-time remote management realistic. Having friends or family in the area to handle the little things like checkups on the property and local services coordination helps immensely in making this work.