Managing Your Interstate Properties

Market Insights
8 years ago
3 minutes

Part of a successful investment property strategy is buying properties that offer a good rate of return, and sometimes, that means going outside your local area to other states and territories to get the best deals. Of course, one of the problems with owning distant properties is management: Keeping track of tenants and staying current on repairs and maintenance issues becomes much more difficult when your investment properties are located far away.

Managing from a distance

Most landlords with distant properties have systems set up that allow them to remotely manage their properties without the need for constant and costly visits. Unless there's a helpful relative nearby, that system involves hiring a property management company to oversee tenant issues, including finding new tenants for vacant properties and evicting tenants who are behind on rent, as well as taking care of maintenance and repair issues as they arise.

Hiring a good property management company takes time, and when you're hiring one from outside your general area, one of the best ways to compare companies and evaluate performance is to ask for references of current clients. Just be sure to follow through and contact those clients to see what they have to say. Reputable companies should have no problem providing you with a list of references to contact. If the company balks or gives excuses, that could be an indication that their customers aren't very satisfied. And, while it might be tempting to rely mostly on price when hiring a company, it's important to get a list of each company's duties and responsibilities to be sure you're comparing similar services. Likewise, be sure to ask about any additional fees that may not be included in the regular monthly management fee.

Unbiased property management reports

When a property management company does its job, the remote management system can work fairly well. But when the company becomes lax or just plain fails at doing its job, the results can be disastrous. Visit any major landlording forum online and you're sure to read horror stories about a landlord whose properties fell into disrepair when much-needed improvements or maintenance tasks were ignored, or when unruly tenants were allowed to run wild in properties that weren't being actively monitored.

Having an outside party evaluate the property and provide a property inspection report is an effective way to make sure your properties are being managed the way you expect them to be. Inspection reports from a third- party that isn't affiliated with your property management company ensures the information you receive provides an accurate understanding of the state your property is in and how well it's being managed.

Protect your investments

Of course, not all property management companies are poorly run; in fact, there are lots of companies that are reputable and reliable. But even if you have a good property management company looking after your investments, a routine inspection report from a third-party inspection company is still a wise move. Why? Because it can provide you with unbiased information about your property, even uncovering problems that a busy property manager may have overlooked. Reports that include photographs are especially helpful, providing visual evidence of needed repairs, and they can also come in handy when disputes arise. Especially when working with a property management for the first time, it can be difficult to know what to expect. A property management report helps align your expectations with what's really happening so you have a better idea of your property manager's performance.

In short, having another set of eyes on your property is all about having the added peace of mind that comes from knowing you're doing all you can to protect your investments - and maximise your returns - even when you can't be there in person.