In a perfect situation, property managers would live near each property they own; this would make handling any situation pretty simple. Unfortunately, it's not always easy for a person to invest in property in their own city. Additionally, an individual may invest in a retirement home in a different city. Many retirees choose to rent out their future retirement home before moving in themselves, in an attempt to pay off some of the mortgage so it's more manageable later. Whatever the reason, there are a few things property managers can do to make their lives a bit easier when the property they manage is out-of-town.
It All Starts Before the Purchase
Properly managing an out-of-town property starts before that property is even purchased. It's first important to speak with a few real estate agents in the area who are regularly involved in the selling of investment properties. An interview over the phone should suffice, and then agents can send property listings over for the manager to review.
Once a real estate agent has been chosen, it is important to make a trip to the city to view properties. Before going, an individual should pick out ten homes in which they are interested. A property could be snatched off the market between the time it is seen on paper and then in real life, so picking several homes to view is essential.
Also, it never hurts to consider short sales or foreclosures. While these properties may require some tender loving care, their initial low price could help make up for some of the impending expenses that are always related to owning out-of-town properties.
Get References from Real Estate Agent
Property managers who don't want to make repeat trips to a city other than their own will need to find local service providers that can handle issues at a property when they arise. These include handymen, electricians and plumbers, amongst others. It may seem like a hassle to track down and vet all of these professionals from a different city, but fortunately, the real estate agent can help with this task.
When working with the real estate agent to buy a property, finding local service providers is as simple as asking. These professionals often work in a localized area, and they usually have good connections to other nearby professionals in different industries. Inquire about small local companies; they are often more honest about necessary repairs. Make sure to contact these businesses to let them know you'll be using them and to set up arrangements.
Take Advantage of Technology
Once an out-of-town property has been decided upon and local service providers chosen, it becomes necessary to find the right tenants for a property. Fortunately, much of this and the interactions following this decision can be easily handled, thanks to advances in technology. There's property management software out there, for instance, that will provide tenant screening and legal forms for each state. This information is imperative when investing in non-local properties.
When it comes to collecting rent, there's no need to wait long periods for a check to be mailed between cities and states. Most banks allow for transfers online, and if a property manager's bank has a location in the city where their new property is located, a tenant could actually just go into the branch and make a deposit. Of course, this setup may carry disadvantages for both property manager and tenant, so it's often a better idea to just use online rent payment to handle the issue.
While there's no doubt that technology has made it simple and affordable to manage an out-of-town property, some may opt to make their life even easier by hiring their own property manager. Many real estate companies offer property management services, so it doesn't hurt to ask from the outset. It's important to recognize, though, that this option could cost upwards of 10 percent or more of the monthly rent.
While there are undoubtedly some downfalls to managing out-of-town properties, many of the benefits outweigh the disadvantages. Fortunately, it has become quite easy to manage out-of-town properties for those who have initiative.
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