Traveling Landlord: How to Automate Your Rentals & Live Anywhere

This is a post near and dear to my heart.  Being a traveling landlord myself,  it all makes sense.

It was produced by G. Brian Davis of SparkRental.com. 

I have been doing a lot of travelling myself doing a 1031 Exchange, and several trips (1,600 miles each way) to get it ready for a vacation rental.  Maybe a post on that adventure later…

Here is how to be a Traveling Landlord

I don’t know about you, but I didn’t become a landlord because I wanted a second job.

I became a landlord because I wanted passive income. Money that flows in every month without me having to do much – or ideally any – work.

A few years ago, I moved overseas with my wife to Abu Dhabi. I moved with 15 rental properties in Baltimore, which has required me to automate and delegate much of the work of managing them.

Here’s how you can automate your rentals at each stage of the tenancy cycle, to maximize returns, minimize work, and move anywhere on earth.

At Vacancy

It’s easier than ever to advertise vacant properties for rent, from a distance. Simply use your photos from the prior vacancy to post rental listings on websites like Zillow and Craigslist, even before your outgoing tenants have vacated.

But the listings are the easy part. You’ll need several sets of boots on the ground to handle repairs, cleanup, and property showings.

One option is hiring a property manager of course. Before taking that leap, consider a few other alternatives.

Do you have friends and family members in the area, that can collect the keys from the outgoing tenants and determine what maintenance needs to be done at the property to prepare for the next tenants?

If not, you can hire someone local, whether an inexpensive amateur or a leasing agent.

You’ll also need an all-around handyman in the area that you trust. Ask for referrals from other local real estate investors, and if you don’t know any, join a Facebook group specifically for local investors and ask there.

If you hire a leasing agent, they can likely recommend someone.

To help your local agent answer common questions, prepare a FAQ document that they can reference as they show the property.

Collecting Rental Applications & Tenant Screening

Like listing your vacant property, screening tenants from a distance is easier than ever before.

Use a digital rental application that you can exchange over email, that includes an e-signature. From there, run tenant screening reports including a full credit report, nationwide criminal background check, and nationwide eviction report. You don’t even have to hassle with collecting rental application fees – many tenant screening services now allow you to charge the cost of tenant screening reports directly to applicants.

Tenant screening doesn’t end with the reports, however. You’ll also need to pick up the phone and call employers and prior landlords.

Fortunately, VOIP phone services allow you to call US phone numbers from anywhere in the world, at little cost. As an expat, I personally use Skype’s unlimited US calling service and pay around $7/month.

Because turnovers are where most of the work and expenses lie for landlords, screen your tenants not just for their ability to pay the rent, but for how long they’re likely to stay. Look on their rental application – how long have they lived at their current address? What about their home before that?

Longer-term tenants are more profitable and lower-stress tenants!

Signing a Lease Agreement & Move-In

Just like rental applications, you can handle lease agreements 100% electronically nowadays.

Before e-signing on the dotted line, make sure you collect the full security deposit and at least the first month’s rent (if not also the last month’s rent). Use PayPal or an online rent collection service to collect the money electronically and securely – more on these shortly.

Still, you’ll need boots on the ground again, to do the move-in condition inspection. Have your local agent – whether a friend, family member, leasing agent or someone else you’ve hired to help with leasing – meet the new tenants at the property, to fill out a thorough condition report form in writing.

That way, you’ll have written documentation of the exact condition upon move-in, so there are no disputes later who caused what damage. Be sure and have your local agent take lots of photos, with timestamps, and share the files with you for your records.

Make sure you negotiate this move-in inspection as part of the fee if you’re paying someone to help with showing and leasing the property!

Automated Rent Collection

If you want the freedom to live anywhere as a landlord, you can’t accept cash or paper checks like it’s 1962.

You need an electronic form of payment, and once again, it’s easy to do in today’s digital economy.

While you could use a one-size-fits-all platform like PayPal, you’ll have better service as a landlord if you use a service specifically designed for rent payments.

Why? Because in addition to rent and expense tracking, rent collection platforms often offer options beyond bank transfers. On some platforms, tenants can pay rent by credit or debit card.

For completely automated rent payments, there are a couple services that pull the rent directly from the tenant’s paycheck. For full transparency and disclosure, I’m one of the co-founders of SparkRental, one of the companies that offers this service (called RentDeduct).

Regardless of who you use for electronic rent payments, the more automated you can make your rent collection, the better.

Handling Repairs

Earlier we touched on the importance of having contractors and handymen that you know and trust in the area. While it’s true even if you live near your rentals, it’s doubly true for long-distance landlords.

Start building a digital rolodex of affordable handymen and specialist contractors for HVAC, plumbing, electrical, roofing, and so on. You never know when you’ll need them.

Being unable to see the property’s condition for yourself, you’ll need to rely more heavily on your contractors, and on your tenants. Don’t reveal that you’re not local, as many unscrupulous contractors will take that as a license to quote you a higher rate.

Be sure to get at least three quotes for every job, to minimize the risk of contractors over-quoting you.

Develop a relationship with your all-around handymen, so that you can trust them to handle a broad range of repairs without you needing to peer over their shoulder.

Evictions

If you live abroad, or even out-of-state, you’ll need local help with evictions.

Fortunately, there are affordable eviction services across the country that can serve delinquent tenants with legal eviction notices, and who will show up in court on your behalf.

When your tenants fail to pay rent by the first of the month, get aggressive with late rent and eviction notices. Tenants will push your boundaries, and if you let those boundaries slide, then you’re setting the stage for ongoing rent collection and other tenant behavior problems.

Even if it costs you money to hire an eviction service to file an eviction, be prompt in doing so to send a loud, clear message to your tenants that you have zero tolerance for lease violations.

Your tenants will think twice next time about breaking your lease agreement.

Move-Out: Full Circle

When your tenants give you notice that they’re planning to vacate at the end of the lease term, it’s time to start laying the groundwork for filling that next vacancy.

First, contact your local boots-on-the-ground agent and arrange for them to do a move-out inspection with the tenants. They should use the same inspection form they used initially, during the move-in inspection, to establish exactly what damage is new, and what damage was pre-existing.

Make sure they have the tenants sign and initial the inspection form, just like at move-in! They’ll also need to take a new round of photos, with timestamps.

This will prevent disputes over the security deposit.

Since this local agent will also be showing the vacant property and doing the move-in inspection for the next set of tenants, negotiate all of these to fall under a single fee.

Coordinate with your favorite handyman for any repainting and other repairs, and schedule it several weeks in advance for the day after the tenants move out. Contractors’ schedules fill up quickly!

If you own your rentals under an LLC or other entity, you’ll need a resident agent service. While you can find these for as little as $100/year, it’s still an expense you’ll need to budget for if you live out of state.

The stronger your network, in the city where you own rentals, the easier it will be to manage them from afar.  Build relationships with contractors and a local agent, enforce your lease agreement aggressively, and you’ll find that managing your rentals from afar is not only possible but frees you to live whatever lifestyle you choose and design.

What do you think about being a hand-on landlord, or a travelling landlord?

 

1. Brian Davis is a landlord and travel addict who spends ten months of every year abroad. He’s the co-founder of SparkRental.com, which provides automated rent collection, a free rental property calculator, free video courses, and state-specific lease agreement packages. Feel free to reach out to Brian at any time through SparkRental’s website, or through their Facebook page!