So, you own a rental property, but the problem is that you don’t live in the same state that it’s in. Don’t worry – you can mitigate the challenges of being a long-distance landlord by doing one simple thing: partnering with a property manager. In this article, we unpack some of the pros and cons that come with long-distance property ownership. Plus, we share the top secret to successfully running your rental from afar.
Pros of Being a Long-Distance Landlord
Becoming a long-distance landlord does come with a few benefits, including:
#1 Ability to Buy in More Affordable Markets
One of the main benefits of long-distance “landlording” is you don’t have to buy in only one market. You’re free to find properties anywhere in the world, which means you have more opportunities to make money. If you can’t afford to purchase a property where you live, you can find cheaper properties in, say, the Midwestern states. You can also choose to live in a city with a lower cost of living and buy elsewhere – by saving on your personal costs, you’ll be able to buy more properties.
#2 You Have a “Backup” Home
Running a rental long-distance is ideal for people who intend to move to where their investment property is located. You may not want to live there now, but you do plan to turn it into your primary home down the line. Or, you may own a long-distance property with the intention of turning it into your retirement home one day. The rent you collect until you’re ready to move into your home can be used to pay for your bills and loans.
#3 Your Investment Doubles as Your Vacation Home
As a long-distance landlord, you can use your rental as your holiday home – that is, if your property is a short-term rental. Because you have a vacation home, you can save a substantial amount of money on your accommodation.
Pro Tip: Vacation homes have unique requirements that only a vacation home property management company can meet. Consider partnering with the pros to make sure your short-term rental is managed smoothly.
#4 Deduct Travel Expenses From Taxes
You may be able to deduct your travel expenses from your taxes as long as you spend most of your time inspecting your investment property. You can’t deduct your travel expenses if you only visited your property to rest and relax. Be sure to consult a property management company about what you can and can’t subtract, or else you might be in trouble with the IRS.
Cons of Being a Long-Distance Landlord
Now that you know what the pros of being a long-distance landlord are, let’s break down a few of the cons:
#1 Unfamiliarity With the Market
Running your rental from afar can be risky because you aren’t knowledgeable about the market. You don’t know how much homes cost, how much the rent is, and what your tenants want. Plus, you aren’t well-versed in landlord-tenant law. This makes it extremely easy to make mistakes even if you do take the time to study the market.
If you really want to own a long-distance rental, you need to partner with a local property management company. They will be on the ground to make sure your rental is run efficiently.
#2 No Established Vendor Network
What will you do if your tenant calls to report a serious issue? If you lived nearby, that wouldn’t be a problem – all you’d have to do is either drive to the property or call one of your trusted service providers. But as a long-distance landlord, there’s a good chance you don’t have a vetted network of vendors. You’ll likely waste time trying to Google for the “best plumbers near me”. To make matters worse, you won’t get to conduct a thorough background check – this puts your property (and your tenants) at risk.
#3 Risk of Late Rent Payments
It’s rare for landlords to collect rent in person these days as most of them use online platforms. This means collecting rent won’t be much of a problem if you decide to be a long-distance landlord – that is, if your tenants pay on time. But what if they aren’t prompt payers? You can follow up all you want, but there will still be tenants who’ll refuse to pay rent. Unfortunately, you won’t be able to chase after your tenant because you live far away. Plus, your tenants may attempt to move out without warning to escape having to pay rent.
#4 Reduced Control Over Day-to-Day Operations
As a long-distance landlord, you need to understand that most of the decisions won’t be made by you, but by someone to whom you entrusted your duties. Since you can’t pop into your property whenever you want, you’ll have to trust other people to take care of it for you. This may be bad news for landlords who want to have 100% control over their rentals. But it isn’t all that bad – in fact, even landlords who live in the same place as their properties still choose to partner with a property management company. The benefits of working with a property manager far exceed the disadvantage of not having complete control.
How to Mitigate Long-Distance Property Ownership
Considering all the cons, you may be thinking that being a long-distance landlord is a bad thing. It can be risky, but that doesn’t mean you can’t own a rental from afar. In order to successfully run your rental as a long-distance landlord, you must surrender all your responsibilities to a South Florida property management company. In essence, you can still be a long-distance landlord, but an absolutely hands-free one.
Here’s why you should hire a local property management firm in South Florida:
- Familiarity with the market. Local property managers are more likely to make sound decisions due to their in-depth knowledge of the market, rent trends, and more.
- 24/7 availability. Concerns can arise at any time, so it helps to have someone available 24/7 to deal with maintenance and repairs.
- Constant communication. You don’t have to worry about being kept in the dark. A good property management company will keep you up-to-date through cutting-edge technology.
- Relationship-building with tenants. Tenants want to have a close connection with the person in charge. You won’t be able to bond with your tenants if you’re far away, but your property management company can do that on your behalf.
- Conduct strict tenant screening. Finding great tenants from a distance can be a challenge because you won’t get to meet them and conduct a thorough background check. Local property managers will conduct in-person interviews to ensure your tenants are responsible and won’t cause trouble.
- …and many, many more.
Manage Your Long-Distance Property With Luxury Property Care
You can count on Luxury Property Care’s expertise in managing and maintaining rental properties in the Sunshine State. Whether you’re minutes or miles away from your rental, you can leave your day-to-day duties with us. We’ll be your eyes on the ground to guarantee your property is run as smoothly as possible.