How to Manage your Out of State Rental Property
When delving into real estate investments, the initial inclination often leans towards staying within the familiar confines of one’s local market—an understandable sentiment. Being in proximity allows for a better grasp of the market dynamics and a sense of ease when it comes to tenant interactions and rent collection. Despite the perceived challenges, venturing into markets beyond your immediate vicinity can prove to be a rewarding strategy, presenting opportunities for more cost-effective investment properties.
As you navigate the realm of real estate management, you’re confronted with choices: opt for hands-on self-management, enlist the services of a property manager, or engage a property management company. Regardless of your preference, it’s inevitable in our tech-driven era that some form of software will play a pivotal role in executing and streamlining your business operations.
Online Rental Applications
Once you’ve successfully secured your long-distance rental property, the next critical task involves attracting tenants. An efficient way to achieve this is by showcasing your investment property on widely-used syndication platforms such as Zillow, Hotpads, Trulia, Realtor.com, or Doorsteps. These sites draw a substantial audience actively searching for apartments and rental properties. Streamlining this process is made easier with property management software, allowing you to syndicate listings effortlessly with just a simple push of a button.
It’s worth noting that if you choose platforms like Zillow for your rental postings, be aware that they entail a posting fee—a policy Zillow has implemented across all 50 states.
Potential tenants browsing these platforms can express their interest by submitting an application request. Typically, applicants provide essential details such as their name, phone number, email address, and a brief message. Once you’ve gathered this information, property management software comes in handy once again, facilitating the generation of invitations for formal applications from interested candidates.
Screening Out of State Tenants
When it comes to vetting tenants remotely, there are several strategic steps you can employ. A fundamental approach is the utilization of a comprehensive rental application. Landlords often craft or acquire a standardized application form designed to extract detailed information about prospective tenants. These applications typically cover a spectrum of details, encompassing personal information, employment history, financial particulars, and any other pertinent data crucial for assessing the tenant’s suitability for your rental.
In tandem with the application process, landlords commonly conduct a thorough background check on potential tenants. If the intricacies of running a background check seem daunting, fret not—most property management software includes a user-friendly built-in background check feature that simplifies the tenant screening process. Additionally, external resources like TransUnion can be enlisted for tenant screening purposes.
Collecting Rent from Out of State Tenants
Vital to the seamless management of rental properties is the collection of rent—a process where technology plays a pivotal role, especially when managing properties from a distance. The conventional methods of relying on paper checks or physical cash become impractical when you’re not in close proximity.
Fortunately, with the increasing integration of technology in real estate investing, collecting rent remotely has become a hassle-free endeavor. Property management software emerges as a highly effective solution, surpassing the functionalities offered by money transfer apps like Venmo or PayPal. Unlike these alternatives, property management software extends its utility beyond mere transaction facilitation.
By leveraging property management software, you can effortlessly generate rent charges throughout the lease duration. The platform enables tenants to set up automatic transfers, consolidates all payments in a centralized location, and even provides accounting features that prove invaluable during tax seasons. This electronic payment system allows tenants to pay conveniently with their bank accounts or cards, eliminating the need for physical handovers or the inconvenience of driving around to collect checks or cash.
Filed under: Landlord Tips