The Downside of Absentee Landlording

By E-Renter Tenant Screening
Posted on May 31, 2013 under Landlord Tips | Be the First to Comment

Stewart, who lives in Pennsylvania asked us what we know about the success rate of landlords whose rental properties are located hundreds of miles away. He was thinking about buying a single-family house in Florida, where he has a vacation home. “It’s priced right, and I’m down there a couple of times a year,” he said. “But I think I’ll be worried about not checking on my property enough.”

Stewart is right to be worried. While he can certainly hire a property manager to keep an eye on things, it’s usually better for landlords to have hands-on management of their rental property.

Why? For one thing, property management costs money. Showing the property, vetting applicants, running background checks and collecting rent take time, and for that you have to pay—and it will consume a portion of your profits.

As Stewart mentioned, another good reason to be a local landlord is because you can check on your property more often. Driving by to see if any strange (as in criminal) activities are going on, checking to see if security lights are on at night and having the opportunity to chat with tenants are all benefits of hands-on rental management. When tenants know you, the relationship is going to be better, and they might even take better care of your property!

Absentee landlords usually have more problems with their rental properties, although they don’t always know it. More parties, calls to police, trash piling up and uncut lawns tend to occur where landlords are not in the picture. Visibility means something, both to tenants and to the neighbors that have to live with your tenants!

However, if Stewart is going to buy the Florida property, he should hire a PM. It’s too risky to manage a rental property through the Internet and mail. The right property manager is worth the money they charge, if they can fill vacancies, find the best tenants and see repairs and maintenance are kept up.