9 Tips for the Out-of-State Landlord
How to Manage Rental Property Remotely
Last Updated: October 10, 2023
Written by
Cindy Pereira
Cindy Pereira, MFA, BA
Cindy Pereira joined the LawDepot team as a Marketing Writer in 2023. Before that, she worked in the print and publication industry and honed her craft through freelance gigs. She completed her MFA in Creative Writing at the University of British Columbia in 2022 and also holds an applied degree in Professional Writing and Communications from MacEwan University. She is interested in taking complex topics and making them accessible to all readers.
Reviewed by
Connell Parish
Connell Parish, BA, JD
Connell Parish is a Legal Writer for LawDepot. Connell completed his undergraduate and law degrees at the University of Alberta and particularly enjoyed researching various legal topics from the rule of law and social media to energy law at the Alberta Utilities Commission. He brought his love for legal research to LawDepot, completing his articles at LawDepot and being called to the bar in Alberta in 2023.
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Jasmine Roy
Jasmine Roy, BCS
Jasmine is a professional writer, editor, and SEO specialist with over five years of experience in content creation and digital marketing. In 2018, she completed her Bachelor of Communication Studies at MacEwan University in Edmonton, Alberta. She's been telling stories and passing on important information to the public ever since. Starting her career in journalism, Jasmine has always had a strong sense of civic engagement and the importance of law. Now, she uses her communication skills as a Marketing Writer and Editor at LawDepot.
Key Takeaways:
- Homeowners are turning their old homes into rentals when relocating, but managing property from out-of-state can present challenges.
- Successful long-distance management involves trustworthy tenants, clear communication, local contacts, compliance with laws, automated payments, and considering a property manager.
- With careful planning and strategic support, remote property management can be profitable and manageable for homeowners.
Table of Contents
- Find trustworthy tenants
- Enforce strict lease terms
- Establish clear communication
- Make friends with local service providers
- Insure your remote rental property
- Inspect your remote rental property
- Learn local laws and regulations
- Set up an automated payment system
- Consider hiring a property manager
- Make out-of-state property management work for you
Instead of selling a house after relocating to a different city, many homeowners are transforming their former homes into rental properties.
Although it’s a great way to bring in extra income, managing a rental from a different state comes with a few hang-ups. For instance, it doesn’t allow you to respond to emergencies like you easily would if you lived close to your rental property.
That’s not to say you can’t successfully manage your rental from afar!
Here are nine tips to overcome the physical distance and make the process easier for yourself and your tenant.
Find trustworthy tenants
As an out-of-state landlord, you won’t be physically available to tenants when an issue occurs or you need to enforce property rules. So, you’ll want to bring in a trustworthy tenant that doesn’t need too much supervision.
It’s necessary to screen all potential tenants. An important part of this process is to collect the right information. Ask potential tenants to complete a rental application and use technology, if needed, to interview tenants remotely. What’s more, make sure the questions you ask during an interview adhere to the Fair Housing Act.
As an out-of-state landlord, here are some questions to prioritize during tenant interviews:
- Does the tenant have a stable source of income and job security ?
- How much property maintenance does the property require on a regular basis? Can the tenant assume some responsibility for these tasks? For example, an elderly couple may be unable to handle physically demanding tasks.
- Does the tenant’s lifestyle affect the way they might use the property? For instance, pets and children may require more space and sturdier fixtures.
- What mode of communication does the tenant prefer? Do they have a history of good communication with past landlords
These questions will help you find a candidate with the ideal traits of a tenant you can manage at arm’s length.
You can also rent to friends, family members, or referred tenants—but this comes with risks, as familiarity might lead to a conflict of interest and stress. That’s why it’s important to screen friends or family members too. They might assume you’ll be more lenient with them than with a regular tenant.
So, to prevent potential misunderstandings, establish clear rules for the tenancy and enforce them consistently.
This brings us to our next tip!
Enforce strict lease terms
Discuss the lease terms with your tenants before they move in. Ask questions and allow time for them to ask questions as well.
Ensure that your tenant has a copy of the lease and that you keep the original for your records. Refer to this document anytime there are questions or a need for clarification.
As an out-of-state landlord, you might encounter tenants that push your boundaries. Maybe you’ve implemented a “no smoking” policy or prohibited your tenants from renovating the property beyond basic repairs. Still, they could ignore these rules since you can’t physically confront them.
To enforce the lease terms, send a formal letter (either via mail, device, or in-person) as soon as you become aware of a problem. It’s essential to issue warnings so you can deal with tenants’ behavior or actions swiftly. If you have a property manager, ask them to deliver the notice on your behalf so there’s an authoritative presence on the ground.
Remember to leave room for flexibility. For example, say the original Lease Agreement disallows pets. However, the tenant may be able to prove they can keep a pet without risking damaging the property. In this case, you may be willing to amend the Lease Agreement so the tenant can keep a pet (perhaps adding conditions such as a pet deposit).
Communicating with your tenant goes beyond discussing the lease, though.
A Lease Amendment Form allows you to change or modify an existing lease without signing a new Residential Lease Agreement.
Establish clear communication
Establishing clear communication is vital before your tenants move in and during their tenancy. This sets the tone for the rest of your landlord-tenant relationship.
As an out-of-state landlord, you can’t swing by in-person. However, you can still check in via phone, email, or text. For instance, if either of you plan to travel (or will be otherwise unavailable), agree to give each other fair notice so there aren’t any surprises when you can’t get a hold of one another.
Providing your tenants with multiple ways to contact you (or your property manager) ensures that you can quickly communicate with each other in case of an emergency or repairs needing immediate attention.
Make friends with local service providers
Connect with local service providers in the area, such as plumbers, electricians, and maintenance specialists.
As an out-of-state landlord, you’re limited in your ability to personally assess repairs. Rather, you’ll need to rely on the insight and expertise of your maintenance team. As such, it’s crucial to have a list of trustworthy contacts that you can call on to get the job done.
Your tenants will also feel comfortable knowing that you have a team of professionals coming to their aid if their sinks clog or their furnace breaks. Refer your tenant to your trusted contacts list if they ever need immediate help. You’ll be able to save money by researching the cost and quality of a service provider in advance.
A good maintenance specialist can also stop an issue from getting out of hand, saving you from unnecessary property damage and the headache of contacting your insurance company.
Insure your remote rental property
Whether renting your property out-of-state or locally, you will want insurance. For rental properties, you need landlord insurance instead of homeowner's insurance.
Generally, landlord insurance policies offer coverage in three different categories:
- Property damage: Covers physical damage done to the property (i.e., fire or tornado)
- Liability: Compensates you if are found liable for injuries on your property
- Lost rental income: Compensates you for lost income or rent if your rental property sustains damages and becomes uninhabitable
You can also add the following extras to your landlord insurance policy:
- Flooding
- Earthquakes
- Water backups
- Vandalism
- Acts of war
Ask your tenants to get renters insurance as well to protect their belongings.
Inspect your remote rental property
As with any rental property, near or far, inspections are a must. If you’re unable to complete the inspections yourself, your property manager or a trusted individual can do them for you. These inspections should include:
- A preliminary walk-through before the tenant moves in
- A final inspection after they move out
- Regular inspections throughout the tenancy (If needed for peace of mind)
During move-in and move-out inspections, you should document the condition of each room in a Rental Inspection Report and then sign and date it.
Some landlords also opt for regular inspections, especially if they’re wary of the property’s condition for some reason (e.g., ongoing renovations or recently laid sod). If you can make time to travel to your rental, regular inspections are reassuring. Remember to let tenants know when they can expect you and give them the opportunity to be present for the inspections.
Most states require that you provide at least 24 hours' notice before non-emergency entry. Check your state's regulations before entering your rental property since this could vary from state to state—which brings us to tip number seven.
Rental inspections should always be conducted before a tenant moves in and after they move out.
Learn local laws and regulations
Residential landlord and tenant laws vary by state, county, and city. Make sure you follow the laws and regulations wherever your rental property is located.
Here are a few examples of how laws and regulations differ by jurisdiction:
- New York allows rent control , whereas Tennessee does not
- In California , landlords cannot charge more than two months’ rent for unfurnished properties or three months’ rent for security deposits
- Georgia has fairly lax lease laws , which might give you more freedom as an out-of-state landlord
Colorado landlords are not required to have a rental license state-wide, but some cities have their own municipal requirements.
Some states favor tenants, and others prefer landlords. That is to say, some landlords will have broader authority to manage their rental properties than others. Municipal laws can create requirements that impact leases as well.
That’s why it’s crucial to check your state and local guidelines before making any decisions.
Set up an automated payment system
Getting rent payments from tenants in another town or city is tricky if you’re used to accepting cash or checks on the first of every month.
Set up an automated payment system to avoid any hiccups. This will allow tenants to pay you directly through their bank accounts. Popular automated payment systems include:
Finally, don’t forget to send your tenants a Rent Receipt after each payment and to keep a copy for your records. Maintaining accurate records is especially important as an out-of-state landlord. Some tenants may try to avoid responsibility or deceive their landlord if they think you’re not paying close attention.
Consider hiring a property manager
Managing a rental property from a distance and balancing other aspects of your life requires great time management and a lot of patience. You might need some help running things. That’s where a property manager comes in.
A property manager oversees and manages the ins and outs of a rental property. They can be responsible for tenant affairs, administrative duties, and maintenance. Property managers can also bridge the gap in communication between tenants and landlords.
You can hire a property manager by:
- Consulting real estate agents in the state where your remote property is
- Asking for referrals through other landlords that live in the state
- Hiring a trusted family member or friend to act as the property manager
Make out-of-state property management work for you
Managing a remote rental property can be difficult, but it’s doable. With trustworthy tenants, you might discover having an out-of-state property to be no more work than having one in-town. Whatever the case, make it easy on yourself by being prepared for emergencies, maintaining regular communication with tenants, finding reliable maintenance specialists, or opting for a property manager to supervise your property.
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