Owning a rental property can be a lucrative business. There's a lot of potential for landlords to generate passive income by renting out homes. Real estate isn't all passive, though. Property owners should be checking in on their rental properties on a regular basis to ensure tenants are taking care of the home and that everything is in good working order.
What happens if your property is out of state, though? Often, the best deals on real estate - and therefore, the largest profits - lie in places other than your local community. Investing in these properties makes financial sense, but keeping tabs on them becomes much more complicated.
It's not a hopeless situation, though. Here are five simple tips the pros use to keep tabs on long-distance properties:
1. Use online landlord software to streamline management.
You know the saying: "There's an app for that." Online landlord software allows you to handle the process of screening tenants and accepting payments electronically and remotely, all from one central location. We could all use a little streamlining in our life and business, and property management software is a great example of this type of technology.
2. Install smart locks to boost security.
One way you can make sure only authorized individuals are entering your property is by installing smart locks on your doors. Smart locks allow for keyless entry, eliminating the hassle associated with creating or replacing lost keys. Better yet, the keys can't be reproduced or transferred without your permission. You can even control who has access to the home from your smartphone, so when a tenant moves out, it's easy to deactivate their access and grant it to the new tenant. This saves both time and money when having locks replaced.
3. Stay involved with neighborhood homeowners associations.
Plenty of neighborhoods have active homeowners associations (HOAs) that make sure all properties within specific boundaries are kept clean and maintained, so be sure to make use of this type of network. Establish regular communication with the board and check in with them often to make sure your property meets any HOA requirements. They'll be more than happy to let you know if something looks amiss so that you can address it quickly.
4. Plan occasional trips for inspections and showings.
You'll still have to make physical trips to see your property every so often. In these instances, try to coordinate with your tenants so that you can hit all of your area properties in one trip. And if you're worried about the expenses associated with these trips, remember that these trips can be beneficial come tax time. Being a landlord is a business, and as such, you can claim the visits as business expenses when tax season rolls around. Make sure to save all your receipts, as travel, lodging, food, car rentals and gas can all add up. If you're not sure whether or not an expense is eligible, talk to your tax professional.
5. Consider a home warranty.
A home warranty can be a huge time-saver when it comes to repairs, making them a great solution for out-of-state landlords who don't live within close proximity to their rental property.
Keeping up with your rental properties is critical to success in real estate, but it doesn't have to be a daunting task. Armed with these tips, you'll be off to a great start with turning your out-of-state property into a source of consistent income.
Are you in the market to buy a home? Let the experience of the Tress Team at Keller Williams help with finding the right home and helping you secure the funds to buy it. We will provide a free, no-obligation consultation to buyers to begin the process. Get started with your home search at www.TressHomes.com and/or email us at firstname.lastname@example.org.