Owning residential real estate places a particular set of responsibilities onto a property owner, from determining the right rent price to managing multifamily homes. The fact that absentee landlords don’t live on their property (and often not even in the same area) doesn’t mean they should be any less available when issues arise, but “being there” can be complicated.
Distance can make the role more difficult, to be sure. Calls from tenants can mean traveling, paying another party to drop by for appraisal/repairs, or ending up with bills and expenses way beyond what you’re willing to pay. This guide will help absentee landlords limit troubles and trips by meeting all expectations and having safeguards against the unforeseen.
Be Certain of Absentee Landlord Obligations at All Times
The best absentee landlords care for the three P’s: property, people, and personal interests. Those first two factors have legal and moral requirements if they’re to be met successfully. Failure to do so negatively impacts the third.
Let’s explore these by breaking down the No. 1 tip for residential real estate, which has several important sub-points.
The More Insurance in the Equation, the Easier Being a Landlord Is
Sometimes property problems are accidental, sometimes tenants are to blame. Insurance coverage can prevent both parties from being negatively affected. Here are some details about proper insurance for landlords.
Make Landlord and Renters Insurance Essential
Being a landlord can be rewarding and lucrative, but inevitably there will be costly expenses and possibly even lawsuits. Every absentee landlord must make the best landlord insurance a priority to ensure that they and their investment are protected.
Renters Insurance Is Like Landlord Protection by Proxy
We recommend ensuring your tenants cover themselves too. Renters insurance protects the tenant and their possessions but can also shield landlords. These policies are particularly helpful if your rental is an apartment, condo, or multifamily unit where an incident in one space can affect others.
Renters Insurance Can Save Landlords Money
A tenant’s renters policy can help absentee landlords reclaim their deductible after paying for property damage. It can also protect landlords from personal liability expenses. Tenants with high personal liability coverage are preferable.
Renters Coverage and the Law
Renters coverage is not legally required, but it’s within every landlord’s legal right to require renters insurance as part of the lease, or to add it as a requirement at a later date. Landlords are also within their rights in asking to be added to a renters policy as an additional interested party (AIP).
Does AIP Status Give Landlords Extra Coverage?
No, this won’t provide the landlord with any additional policy protection, but it does provide greater tenant transparency via regular updates on how the renter’s policy is being maintained and managed, which at least offers the landlord some greater peace of mind.
How to Explain Renters Insurance to Tenants
Refer to our guide on explaining renters insurance for how to answer tenant questions.
As you can see, it’s important for all absentee landlords to have proper levels of insurance for themselves and their tenants. Now let’s look at some other essential practices in optimizing residential real estate.
More Golden Rules for Absentee Landlords
Having both sides insured is the just the first step toward peace of mind for absentee landlords. Follow these tips to keep your relationships with your tenants on harmonious ground.
1. Know Your Tenants’ Rights (and Your Limits)
All forms of discrimination are illegal under the Fair Housing Act, and personal questions should be avoided beyond anything that may negatively affect the property. Tenants cannot be asked to make major repairs (sometimes not even minor ones) and have a right to 30 days’ notice before eviction proceedings. Read our blog for more on the landlord/tenant agreement and contact a professional for the bigger picture.
2. Drop By Occasionally for Pre-Arranged On-Site Checks
“Out of sight, out of mind” can quickly become “out of pocket” for absentee landlords. Pay your property a visit at lease-highlighted intervals to see its condition firsthand and how the surrounding area is being developed. Alternatively, send a trusted party, but don’t forget to give tenants the required notice in either case.
3. Secure Unoccupied Rental Property
COVID-19 is resulting in a lot of evictions, and there’s not always a new tenant ready to pay. Make sure doors are locked, all windows are secured, and smoke alarms are active in empty rentals. Vacant-property insurance is also a good idea for greater security on top of landlord’s coverage.
4. Stay Informed on the Real Estate Market and Trends
Monitor property values in your rental’s area to better evaluate your investment and keep a finger on the pulse of any upcoming local developments and tenant trends. Here’s some expert insight on how to start.
There’s a lot that absentee landlords can do for themselves. However, taking on too much responsibility alone can make the role much harder.
Common Pitfalls for Solo Absentee Landlords
Even the most diligent landlords can find some outside help to be a great relief. Consider the following before managing residential real estate by yourself.
- Not every absentee landlord has a trusted party who can visit, inspect, or repair the property in their stead.
- Emergencies may necessitate an immediate visit, which may be impossible for a landlord under some circumstances. Slow response times can endanger tenants and property while risking breaking the law.
- Failure to draft and execute a thorough tenant-screening process can be a risky and costly proposition.
- Not every landlord is a people person. This can make communication, conflict resolution, and rent collection uncomfortable experiences.
- Staying fully compliant with the law can be a confusing and overwhelming task.
- Effectively promoting a rental property to prospective tenants across multiple media can be a real challenge.
These aren’t the only challenges that can arise. Finding a partner to help meet the demands of residential real estate can make a huge positive difference for absentee landlords, their tenants, and their property.
Talk to the Experts at Nomadic if You’re an Absentee Landlord
Hiring a seasoned residential real estate management firm like the Nomadic Real Estate team guarantees that every aspect of the landlord/tenant relationship will be professionally handled, from legal matters and maintenance to tenant communication and agreements.
Both current and prospective landlords can benefit from our experience, insight, and commitment. Contact Nomadic Real Estate for more information about your Greater D.C. property management needs.
