Building Your Remote Rental Home Team
Running a residential rental property remotely well boils down to how much time you invest into building and managing your systems, team, and how those two intertwine to mitigate as much risk as possible. Issues will arise, but if you have great resources and plans in place, they’ll be much easier to handle.
I’ll assume if you’re reading this article, that you already understand the basics of real-estate investing. You’ve saved up some capital, but its not enough to invest in where you live. So should you look into other markets and purchase a rental property that you can’t physical access? The answer is “probably,” but it depends on what you’re looking at and what resources are available.
You’ll need to find a market first, so make sure its somewhere that makes sense financially (Start with the 1% Rule and build your criteria from there). Once you’ve found your market, you’ll need to put together your team. These people are imperative if you’re going to be successful running a rental from afar. My preferred method of communication with everyone is email, or text if its urgent, but everyone has their own preferences. Personally, I don’t invest in real-estate remotely because I enjoy spending my spare time taking phone calls.
Begin by searching for property managers in your market. The property manager is crucisl in running the ongoing operations of your rental, so take your time to find the right one. You aren’t looking for the company that charges the lowest fee (I pay 10% to my management company), you’re looking for someone that cares about what they do, and your property. The single most important part of running a rental, is getting the right tenant. Sadly, this gets overlooked often because people are desperate to get a property filled so they accept the first tenant that they can. You’ll want to learn about how they fill their properties, how many doors they’re managing, their process, and how they deal with evictions. The more you learn now, is the less you’ll need to learn later.
If you need repairs completed to your rental, get your property manager to hang a lock-box at your property with its key inside. This way, you can communicate with your contractor or subcontractors and coordinate any necessary repairs yourself as needed.
Now you know who’s going to manage your property, so now its time to find a Realtor to get you one. Start by searching for reviews on Realtors in your market, and email the top candidates one by one. Communicate who you are, what your goals are, and that you’re looking for a Realtor who’s experienced in working with remote investors. It’s also ideal if they’re either from the city you’re thinking of investing in, or understand that city really well.
Wait and see how long they take to respond to your email. The first response might take longer than usual, but after that initial link is established, it shouldn’t take them more than 24 hours for them to respond to your messages. If it does, I’d think about continuing the search, since the last thing you need is a Realtor not responding quickly once you find that perfect property and want to start submitting offers. Once you’ve got a few leads, think about setting up a call to get to know them better. Ask them questions about your market, where people are buying, selling, and renting if they know. They might be able to share a contact list as well, so you can start to explore putting together the other pieces to your puzzle. Hopefully, by this point your confident they’ll be able to represent you in purchasing your property remotely. Find your perfect property and get your offers in!
Hopefully, your offer is subject to a home inspection and financing. A home inspector will determine what kinds of rehabs need to be done to a property. Don’t skimp out here — if it costs you $500 to learn that a $150,000 property needs $100,000 of hidden repairs, then that’s money well spent. Be wary of anyone your Realtor suggests, since they may be affiliated and biased in their suggestion. You want someone who is objective, and will point out everything that’s wrong. I know people who saved money getting a great home inspection during the purchasing phase, because it gave them ammunition to bring back to negotiations to shave more off their offer. Once you’ve gotten your inspection, take that and create a list of things that you need to be repaired prior to getting a renter in the property. I use Google Drive to store everything pertaining to my investments, including photos, quotes, contacts, and notes.
Whether you require a general contractor or a handyman will depend on the property. Does it need to be completely gutted and redone before renting, or does it need a quick paint job and bit of plumbing work? If feasible, contact the subcontractors yourself, you can figure out what needs to be done, compare quotes, and easily provide them access to the property with the lock-box mentioned from before. If you’re going to work with a handyman or general contractor, make sure you outline how you’re going to work together — I’d advise drafting up a formal agreement for both parties to sign outlining that process. You also never want to pay for anything upfront, and must be able to validate any work completed (good pictures or videos should suffice) before contractors receive their payment.
Ensuring you communicate effectively and hold people accountable for their actions is key. Be vigilant, if your team gets the sense you’re serious about what you do in real estate, it’ll encourage them to do the same.
This article is for informational purposes only; it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
