An out-of-state landlord has many names like “long-distance landlord”, but they’re commonly known as an “absentee landlord”. Absentee landlords are those who own a rental property but are not always present or do not reside near the property. Even if they live far from their property, they’d still prefer to rent it out and profit off of it.
In this post, find out why some property owners choose to own out-of-state properties. We’ll also share some tips to successfully run a rental even if you live far away.
Why Do Some Owners Become Absentee Landlords?
There are a number of reasons why rental owners may become absentee landlords, but the common denominator is that it’s due to their circumstances. Some landlords may have to move long-distance due to work, while others may come into ownership of an out-of-state property that they plan to rent out. They may also decide to be absentee owners because they feel overburdened by their day-to-day duties, and would rather delegate their to-dos to a property management agent.
What Are the Pros of Being an Out-of-State Landlord?
Being an absentee landlord isn’t always by choice, but it does come with a few pros, which include:
Pro #1: Earn Without Lifting a Finger
As a long-distance landlord, you don’t need to stay in the same state as your rental property. This means you don’t need to wake up whenever you get late-night calls from tenants complaining about their neighbors, work on repairs during the weekend, and more. A property management company will be dealing with these concerns, while you can continue to collect rent without lifting a finger.
Pro #2: Ability to Own Properties Across the States
Why limit yourself to property ownership within one state? Being an absentee landlord means you can buy properties from states that you haven’t even lived in. For instance, if you’re from California, you’re free to run a rental in South Florida with the help of a professional property management firm.
What Are the Cons of Being an Out-of-State Landlord?
Owning a rental property while living long-distance comes with cons, which are:
Con #1: Reduced Property Management Control
As a long-distance landlord, you’ll likely work with a property management company to run your rental. Unfortunately, this means you’ll have to give up most of your control over the maintenance and care of your property. To be at ease, you’ll have to do your due diligence and find a professional and reliable property manager you can count on.
Con #2: Lack of Market Knowledge
You likely won’t be well-versed with the law and the market, particularly if you own properties across many states. You’ll need to put your complete trust in your property management company as they know more about the market than you do. With that said, it may not be the best idea to make business decisions on your own – you’ll need to consult with your property management company at all times.
Why Hire Out-of-State Property Management Services?
Considering those challenges, it does help to hire a property management agency that provides out-of-state property management services. You can delegate your responsibilities to them, and be sure that your property is well-managed. Here’s what you can expect when you partner up with the experts:
#1 They Have a Vetted Vendor List
Being an absentee landlord, you likely won’t have contacts with local vendors like plumbers, electricians, etc. When there’s something wrong with your property, the last thing you want to do is to waste your time trying to find one who can do the repair work. Fortunately, property management firms have built a list of reputable vendors they can trust to respond to repairs promptly. They’re also aware of how much materials and services cost, so you can reduce the chances of being scammed.
#2 They Act as Your On-Site Liason
Even with the presence of tenant portals, many tenants still prefer to communicate their concerns in person. Property management professionals can form good relationships with tenants by maintaining an open line of communication with them. They can then relay their concerns to you, and bridge the gap between you and your tenants. In short, your property management agents provide your tenants with that connection you can’t offer from afar.
#3 They Conduct Routine Inspections
If you’re wondering, “Why do I need to hire a property management company when I can simply use an app?”, the answer is that while you can do certain things remotely, there are also things you can’t do without their help. Inspections, for instance, need to be conducted by real people. This is because you need to be able to see the property’s condition up close.
Property management companies conduct regular inspections to make sure the property is in tip-top condition and check if the tenants aren’t breaking the terms of their agreement.
#4 They Know the Law
Rental laws in South Florida aren’t the same as the laws in, say, South Carolina. If you’ve never lived in the area where you own a rental property, you may have a hard time navigating the rules and regulations. Unfortunately, this also means that you may also be sued by your tenants for failing to abide by the statutes. To be safe, it would be best to partner with an out-of-state property management firm.
#5 Their Presence Is Needed
When tenants know that their landlord lives far away, they’re more likely to violate their rental contracts. One of the benefits of partnering with a property management company is the ability to encourage tenants to do the bare minimum of property maintenance. Your property manager’s presence alone can discourage tenants from failing to maintain the property since they’re aware that someone is always watching.
Property Management Services For Out-of-State Rental Owners
As a landlord, you don’t need to reside in the same state as your rental property. So, if you’ve found yourself doing a long-distance move, you don’t have to give up your property.
Rental property owners who live out of state can take advantage of Luxury Property Care’s property management services. We’ll be your eyes and ears, taking care of all rental-related concerns on your behalf, whether you live in Washington or overseas. You can count on us to take care of tenant-related concerns such as complaints, repairs, and more. With our assistance, you can rest assured that your real estate asset is safe, secure, and on its way to success.