How to Generate Rental Income in a State That You Do Not Live In

Whether you move to another state and want to transition your property into a rental property or simply invest in out-of-state rentals, managing them from afar poses challenges. You can’t always be available to handle problems, perform inspections and collect rent. Here are some tips for generating income income successfully with rentals.

Find Trustworthy Tenants

Carefully screen all applicants to ensure that they can handle payments, will take care of the property and comply with lease terms. On the application they’ll provide employment information and previous rental history, so be sure to contact those listings to confirm accuracy in the details.

Establish Clear Communication

Make sure that you have good communication with potential and current renters to stay on the same page. This helps maintain a solid landlord-tenant relationship. Keep in touch by phone, email or text, because you can’t just stop by in-person.

Enforce Strict Lease Terms

Clearly discuss the entire lease terms with tenants before they sign the agreement and move in. Make sure to listen the potential tenants, and take time to listen to and answer theirs. If you prefer no indoor smoking or trash bags left outside the door, be sure they are included in the legal agreement. You will want to strictly enforce the lease terms unless they have worked out an exception with you.

For example, they may want to get a pet, which requires you to make an addendum to the lease and set terms for them owning one. You don’t want barking or potty outdoors to disrupt neighbors, so explain to the tenant what you expect from them regarding pets.

Should any violations be brought to your attention regarding lease violations issue warnings to let them know that they are on notice for not following the agreement. You’ll want to deal with issues quickly, and a certified letter can be sent to them, or a property manager can deliver notices on your behalf.

Get Acquainted with Local Service Providers

Contractors, repair services, plumbers, maintenance providers, utility companies and landscapers are a few of the local providers that you should reach out to and get to know them a bit concerning what they can do, their average costs and hours of operation. Living out-of-state limits your ability to address repairs and deal with service providers in person. This makes it crucial to have arrangements with trustworthy contacts that you or you property representative can call on when work is necessary.

Insure Your Remote Rental Property

Just like your primary residence having insurance for rental properties is a must. You’ll need landlord insurance rather than traditional homeowners policies. Landlord insurance generally covers property damage like property damage from fire, severe weather and other covered issues. Liability compensates costs should you be found liable for injuries on the property.

Lost rental income due to damaged property that a makes it uninhabitable temporarily is also covered. Ask tenants to get a personal a renters insurance policy to cover their personal items and furnishings. Landlord policies can have riders that enhance coverage with protection due to:

  • Flooding

  • Earthquakes

  • Water Backups

  • Vandalism

  • Acts of War

Set Up An Automated Payment System

It’s tricky to get payments from tenants out of town, but it’s easy to have an automated payment system in place that makes it simple to transfer rental payments to your personal account. Tenants can pay online or through mobile apps directly from their bank account to a management company or other service that handles financial transfers, as many are available.

Consider Hiring a Property Manager

Managing a rental property when you’re in another state take solid time management and a bit of patience. Having someone nearby to handle running things makes renting easier. This is where a property manger plays a role. You simply pay them a set fee, and they take care of overseeing the property, doing inspections, handling administrative dues and provide communication on your behalf to tenants and service providers.

Get Into Renting Properties with Guidance

Hiring someone to handle a good portion of your property’s needs is implied with support. Reach out to Isbell Rentals to find tenants and to hire a reliable property manager to supervise your rentals.

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