Why Is Remote Property Management Not A Good Idea?

In the last fifteen years or so, the American rental industry has exploded in popularity. According to figures from the US Census Bureau, 30.8% of Americans are now living in rented accommodation. Around 45 million rental households now exist in America, up from around 37 million at the end of 2010, per Statista. Such figures show the importance of the rental economy. Yet, as any property investor will tell you, turning your portfolio into a well-oiled machine isn’t quite so simple!

Property Management: A Significant Time Investment

Investment properties, then, are a fantastic choice for anyone with the capital to make it happen. Being a solo property manager, though, is a time-consuming process. Many landlords are not aware of the challenges that emerge, and can soon find that their ‘passive income’ portfolio becomes as demanding as a full-time job. There is also the cost involved in buying into various investment properties.

Making Your Investment Properties Pay Off

However, sometimes, the cost of buying a property in the community you live in can be prohibitive. With that in mind, many a property owner in America now looks to spread their investments across more than one state. As you might have already found out, though, managing rental property remotely is a challenging task.

Remote Property Management: Are The Challenges Worthwhile?

At Utopia Property Management, we rarely recommend managing your property remotely. Instead, if you are unable to manage the property in person, it might be better to hire a property management company like ours. Let’s explore the reasons why landlords should avoid trying to manage their rental portfolio remotely.

The Challenges Involved In Managing Your Property Remotely

Real estate investors, if they want to maintain high levels of tenant satisfaction, need to be involved in the day-to-day operations of their property. That becomes much more challenging if you are working remotely, though. Let’s explore some of the issues you are likely to face if you manage remotely.

1. Boosting Visibility With Marketing Efforts

One of the first issues you might run into when dealing with property management from afar comes down to visibility. With potentially thousands of rental properties in your area, how can you stand out from the crowd?

• For one, you need to have a solid marketing campaign that you keep on top of.
• You also need to be able to modify and adjust your marketing for local market challenges.
• Understanding supply and demand locally helps to create more accurate marketing content.

Yes, the online nature of most property marketing means that you can manage your advertisements from afar. However, most property managers – especially residential property managers – find that it can be tough to understand local market conditions when you are not ‘in the field’.

Rising competition, changing market conditions, and learning from feedback on tenant desires in the area(s) your property portfolio is based in become much more challenging when you are not present. In many cases, it is better to leave your marketing efforts to a property management company instead.

At the very least, they can be present to catch trends and local adjustments that could impact visibility.

2. Finding The Best Potential Tenants Becomes A Challenge

One of the most important decisions you will make as a property owner comes down to your choice of tenant. However, if you are not present to go through the process of screening tenants, and you rely on remote interviews only, you could choose the wrong tenant.

As you might already know, this can lead to issues like:

• Incompatible tenants who are a poor fit for the local community.
• Complaints from neighbors about your new tenants’ conduct.
• The chance of disputes about issues you cannot view in person.
• Unverifiable building maintenance requests you cannot review.
• The risk of tenants taking extreme action, such as changing locks.
• An inability to collect rent on a regular basis from your new tenants.
• Quick turnarounds due to the requirement for evictions ASAP.

If you are not present to carry out the process of screening tenants, you could have problems ensuring they are the correct fit. By hiring a property manager who covers your area, you can make it easier to have tenants screened and their credentials verified.

In the experience of many of our clients, that alone is worth the management fee!

3. Keeping Tenants Satisfied From Afar: Is It Possible?

When a tenant has a problem, they expect you to be able to deal with it for them quickly. Many real estate investors who operate their portfolio remotely, though, struggle to find the time to do this. Consider this:

• If you want to collect your monthly rent, though, you need to make sure you keep your tenants happy; otherwise, you could potentially find yourself in expensive, time-consuming disputes.
• Tenant satisfaction is hard to correct when you are dealing with every problem remotely. Whether you own a series of single-family homes or apartment blocks, being physically present matters.
• The process of verifying and dealing with tenant complaints is far more complicated when you are working remotely.
• That makes it easy for communication issues to emerge and for disputes to become prolonged. That can soon add to the time and cost involved in ensuring the dispute comes to an end.
• By hiring a property management company to head up these issues, though, it becomes much easier to keep tenants on your side and ensure their concerns or complaints receive in-person support.

4. Collecting Monthly Rent & Managing Finances

Recent figures show that the average cost of rent in America is around $1,626 per month. As such, precious few landlords can afford to be in a situation where they do not collect rent on time. With that in mind, consider that:

• Each month’s rent could be a major part of your cash flow, so making sure your tenants can easily go about depositing rent each month becomes essential.
• On the face of it, rent collection is probably the easiest part of remotely managing your property portfolio.
• However, for all of the reasons we have listed above and below, it might be harder to get a tenant to pay their rent on time.
• They might be unhappy with the conditions, and/or feel like you do not provide the support expected.
• Tenants could expect you to provide prompt services to address any concerns or issues they have. If you are working remotely, you might not be able to do so in the timeframe expected.
• That could lead to tenants withholding rent payments until you fix the problems they bring up.
• There is also the sometimes challenging aspect of collecting rent payments in one state and transferring the income to another. You could run into administrative and legal challenges.

Instead of trying to manage your investment portfolio remotely, a property manager can make it easier to address concerns and satisfy tenants who have complaints.

For example, at Utopia, we can help to set up a simpler, more effective rent collection process. That means you should receive each month’s rent on time, and tenants should stay happy with their living conditions without you having to be so hands-on.

5. Maintaining Your Property Requires A Leap Of Faith

One of the most expensive fees that can emerge during your management of a rental portfolio involves maintenance. Maintenance of your properties can cover issues like:

• Upgrading property conditions to make the building more up-to-date.
• Modernizing the property to keep it up-to-date aesthetically and functionally.
• Restoring property features and functions that are essential to tenant laws.
• Maintenance of the building’s entrances, exits, and/or windows.
• Modifying properties to meet certification requirements.
• Ensuring easy access to the property for people with disabilities.
• Repairing structural damage and/or broken appliances.

These cover just some of the issues that could emerge during your management. Managing remotely means having to do things differently:

• For one, you need to review all property damage remotely, often through emails or video calls.
• Determining the scale of the damage becomes more difficult without being there in person.
• So, too, does attributing fault: has the tenant damaged the property?
• You then need to rely on maintenance services that you cannot verify in person.
• This could lead to a poor standard of work and the property not being repaired properly.
• Time and money are wasted as you go back and forth with the tenant to verify repairs.

This is just a small example of the kind of issues that can emerge when it comes to rental maintenance. Your best bet is to hire a property management company like our team here at Utopia.

We can have a local property manager in place who can inspect property maintenance requests in person and make sure the work is carried out by trusted, local professionals or members of our in-house maintenance team.

Thus, the work is more likely to satisfy tenant complaints and provide long-term value growth to your property. That is certainly much easier than having to rely on second-hand accounts of the work carried out, reviewing the work from afar, and liaising with contractors remotely.

6. Creating Valid Lease Agreements Becomes Challenging

Before a tenant can move into your property, you need to create a solid, professional lease agreement. A failure to do so can bring a whole host of legal problems down the line. However, if you do not reside in a state, it can be hard to follow changes to the requirements in lease agreements.

You would be best served by hiring a lawyer in the state(s) where your rental properties are based. They can help you draft legal agreements that are up-to-date, whilst ensuring you have a checklist of issues to resolve to make sure your properties remain compliant.

By hiring a property management company like Utopia, we can give you valuable insight into addressing lease agreements. Therefore, you know your tenants have signed up to agreements that are watertight and protect both parties in line with the law.

7. Difficulties With Certification Requirements & Tenant Protection Laws

Lastly, you could run into problems when it comes to meeting habitation regulations and ensuring your property is in suitable condition. That could lead to problems with your tenants, especially if they flag up an issue that you cannot respond to in person. By hiring a local property manager to cover the day-to-day operations, you have someone in place who can ensure your property meets tenant protection laws.

At Utopia, we cover rental properties in California, Nevada, Washington, and Oregon. For further reference, please review the tenant protection laws in each state for your information:

• Tenant protection laws in California.
• Tenant protection laws in Nevada.
• Tenant protection laws in Oregon.
• Tenant protection laws in Washington.

Why Take The Risk With Remote Management?

As you can see, then, managing your rental properties remotely means running into various challenges. What should you do, then? Should you stick with your current management process, or pay a management fee to a property management company like ours?

Leave Remote Rental Properties In The Best Hands With Utopia

At Utopia, we provide the kind of support you need to make remote rental investments worthwhile. With our assistance, you do not have to move closer to your portfolio; you can stay where you are comfortable. Our support provides expertise in so many different avenues, including:

• Finding quality renters with the help of our marketing efforts.
• Interaction with tenants so that action is taken on potential issues.
• Year-round managerial support
• Around-the-clock emergency maintenance support
• Arranging rent collection and creating accurate financial records.
• In-house support for property maintenance, keeping buildings up-to-date.
• Support in creating professional lease agreements that meet or exceed expectations.
• Assistance in adhering to all required tenant protection laws.

For a small percentage of your rental income each month, you no longer have to worry about these issues. With experience in managing both residential properties and commercial properties, we can replace the confusion and frustrations listed above with a simple, easy-to-use property management service.

Hiring A Property Management Company Has Never Been Easier

From finding quality potential tenants to making dealing with tenant requests easier, we can offer you the help you need to stay remote without the risks mentioned above. If you would like to discuss placing your remote rental portfolio in capable hands, contact us today to learn more.