For as long as rental real estate has been around, one thing that never seems to change is the fact that being an absentee landlord is pretty tough business. I mean, there are a myriad things that need to be taken care of, whether we are talking marketing the units, settling for competitive rental prices, screening applicants and interviewing them you name it.
‘And you know what other tasks are enjoyable? – monitoring properties, carrying out maintenance and upkeep, rent collection, court procedures arising from tenants who fail to pay or break the lease etc.’
Said no single landlord. Ever.
There’s just so much to deal with!
Now, you can imagine how tougher things can get for those who do not have someone to monitor their property on a regular basis. If you are an absentee landlord who prefers or for some reason finds themselves in a DIY approach with respect to managing their property, be advised – don’t do it.
And here are the reasons why.
You Could Miss Important Warning Signs
It comes as no breaking news that absentee landlords often miss signs of brewing trouble on their properties. This can be anything really: serious issues with soil erosion, a tree with a dangerous overhanging branch, junk vehicles parked on the front yard; probably some evidence of vices such as drugs or other criminal activity.
All these are examples of things that can considerably affect the value of your units and hamper their appeal to attract tenants; things you are clearly likely to miss out on if you are an absentee landlord.
Something else you could miss out on are significant trends in the neighborhood that may herald a nosedive in value: coining a reputation for insecurity with an upswing in criminal activity in nearby properties, introduction of deterrent businesses such as strip clubs and what-not.
You Can’t Spot-check for Potential Maintenance Issues
As a landlord, one great way to arrest maintenance-related problems is to ring the doorbell and speak directly with your tenants. Often, they mention those minor roof leaks that need roofing replacement or repair, leaky pipes or other small problems that could exacerbate if not addressed in time by a residential roofing contractor or any other home maintenance specialist. Other maintenance tasks may not show any signs of problems until it’s too late. For instance, septic tank maintenance is usually done every 3-5 years so landlords and homeowners must keep this in their schedule.
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The Local Government Could Turn Against You
If you own rental units in one area code but live in another, you are liable to pay property taxes – but you’ll have no say in whoever gets elected to local office, or the initiatives. To put it another way, laws could be passed without you having a say about it: zonal laws, unfavorable ordinances, landlord tenant laws, taxes and so on.
And there is always the possibility that should absentee landlords like you increase in number in the area, some issues may become sensitive to the local residents who could legally take measures against absentee landlordism. It does happen.
And then there is the issue of rent control. Sometimes, unusually high demand for housing in an area may significantly raise rental rates. Politicians in such markets may move to put rent control laws or other restrictions in place. If you don’t live anywhere near the location of your rentals, you don’t get a vote.
Vacant Rental Properties are Especially Vulnerable
When it comes to monitoring the condition of both rental homes and the neighborhood in general, the inhabitants – your tenants – are probably the best set of eyes and ears. When you have property lying vacant though, you lack that ‘intel’.
In case you didn’t know, unoccupied property is an automatic draw for vagabonds and squatters. It can be used as meth labs in some cases, and what this means is that at some point, it could require decontamination that would set you back a couple thousand dollars.
In such a case, you should perhaps consider vacant property insurance cover which can protect your property if it is unoccupied for 60 days. Standard landlord insurance policies, however, do not offer cover if the property has been lying vacant for lengthy periods.