Owning rental properties as an investment is an attractive practice for many Australians. However, the rental properties you can afford to purchase may not always be in the area where you live. This doesn't mean you can't still manage your properties from afar, but you'll need to be a bit more cautious about how you do it. Follow these tips to help you better manage your long-distance properties so you can generate a decent return on your investment.
How to Manage Property from Afar
In order to get the most out of your property investment when you don't live nearby, use these tactics:
Polish your tenant screening process. Because you won't be on-site to observe the behaviour of your tenants on a regular basis, you'll need to be particularly diligent about the way you screen prospective renters. Conduct a thorough police background check and review the applicant's credit history. You may also wish to conduct an interview with a prospective tenant through video calling, like Skype or FaceTime, to give you a better sense of them as a person.
Hire an experienced property manager.Hiring a property manager is one of the easiest ways to ensure that your properties are being properly monitored. A property manager can handle the day-to-day aspects of finding and keeping tenants, collecting rent, and organising repairs. Aim to stay in touch with your property manager at least once a week to stay abreast of what is going on with your properties.
Build relationships with local tradies. When you don't live in a particular area, it can sometimes be difficult to find quality tradies to complete maintenance and repair work for you. Ask neighbouring landlords for recommendations and read customer reviews online to find reputable service providers. When you find one you like, use the same company or individual for all of your rental properties in that area. Because of the steady work you are able to provide for the business, you may be able to negotiate lower rates, helping you save money on expenses and increasing your profits.
Familiarise yourself with the local market. It is difficult to manage a property when you don't know what sets that location apart from other communities. Do some research online and take the opportunity to visit your properties whenever you can. Spend some time getting to know the local area, including the best restaurants, utility service providers, family activities and more, so you can answer questions from prospective renters.
Iron out your lease terms. When managing a property from afar, it is more difficult to enforce the rental agreements you have set out. Make sure the lease agreement is sound. Work with the real estate institute in the state or territory that your property is being rented in to purchase a standard tenancy agreement. This will ensure that your lease adheres to the residential tenancies act in that state. Also, you'll need to ensure that any special clauses in your lease agreement are legal. If in doubt, contact consumer affairs. A good property manager will know all of this information and can guide you through what can, and can't, be included.
Check in with your tenants. Even from another city, you can still check in with your tenants from time to time using email, video calling, or your property's website or mobile app. Try to get honest feedback from your tenants about your property, property manager and other concerns. You may not get the whole picture from your property manager alone, so it can help to get some other perspectives.
Managing a rental property in another city may seem like a daunting task at first, but it doesn't have to be with some careful planning and attention to detail. Do your best to stay connected to the local community, including your tenants and property manager, to help things go as smoothly as possible. Investing in property from afar can greatly increase your options for your real estate portfolio so don't be shy about diving into this exciting market.