It’s bound to happen— Business-minded people tend to travel and also get into the business of buying second homes. This can entail renting out a property full-time or allowing others to use a vacation home while they’re away.
While passive income from a property is certainly an attractive idea, there is a lot to consider before diving in. Before you become a pilot and also decide to enter the world of rental properties, take inventory of your resources and level of commitment.
If you are one of the ambitious spirits who will often be on the road but also wants to get into rented real estate, consider the following aspects of your endeavor and carefully plan out how you will remotely execute it:
Consider Your Climate
The location of your property and the climate it lives in will greatly affect the amount of care required to keep it sustainably profitable and in good condition:
Cold & Humidity
When it comes to maintenance, temperature and humidity can make a huge difference. If you plan to leave your property empty during cold periods of the year, winterizing or heating (despite vacancy) is likely of necessity, incurring extra costs. If your home is bathing in humidity during the summer, you may need to pay a high AC bill or take other costly precautions to prevent rot and mold growth.
Ultimately, if you’d like to avoid excess hassle due to environmental factors, choose to buy a property in Nevada or another area that is dry and temperate.
Proximity to Water
Homes that are sitting near bodies of water may also need extra care. Rust and salt build-up can really take a toll on the beauty and structure of a building, so make sure you are willing and able to undertake all necessary precautions and extra maintenance.
If you own properties near Salt Lake City or another salt-heavy area, you will especially need to take this into consideration and provide proper care.
Determine Your Needs
It is important to tailor your approach to your specific situation— This requires taking a look at how you plan to use your property, as well as taking all associated maintenance and cleaning costs into account:
Vacation Home
If you plan to primarily use your property during certain times of the year while leaving it vacant during others, it is important to come up with a fitting, flexible maintenance plan that won’t eat up your profits.
In this situation, it is smart to hire professionals to thoroughly clean surfaces and pools, perform inspections and test equipment, take care of all landscaping, and air out your property.
Guest & Tenant Accommodations
If your plan is to consistently keep your property occupied by guests or tenants, a high level of maintenance will be required to sustain smooth operations and a worthwhile bottom line. In addition to keeping a close eye on its condition, aspects of your property that you will want to pay attention to are: cleanliness, security, repairs, inspections, and upgrades. You will also need to stay on top of applications, paperwork, and payments, as well as prepare your property for each new tenant or guest.
This is the baseline— If you want to attract patrons with amazing amenities and an attractive lifestyle, you should plan for even more energy to be invested in your property around the clock.
Set Realistic Expectations
When you maintain a property that is not your primary place of residence, it can take more time and money to maintain than you think. Don’t let this get you down, though— Take an honest look at your resources and set realistic expectations:
Maintenance
We’ve already talked about the many types of maintenance you may have to tackle— Now, the real question to ask yourself is… “How will I handle all this remotely?”
Even the best of us don’t have more than two hands and 24 hours in a day, so think realistically about how often you will be in town, what you can handle on your own, and what you will have to hire someone else to do for you.
Money
If you are thinking about renting out a property, you are likely pretty financially savvy already. It is important to remember that this is a whole new world though, full of unforeseen costs and fees. A lot of research is required if you don’t want to take a ‘learn as you go’ approach, losing time and money along the way.
Make sure you not only have the money upfront to cover your bases but that you’ll be making enough, in the end, to make all your hard work worth it.
Find People to Assist You
Once you’ve determined your intentions, needs, abilities, and budget, it is time to assemble a team to take care of everything that you can’t:
Ask a Friend
If there are only a few tasks that you aren’t able to attend to, it is a good idea to find a group of family members, friends, or others you trust to take care of them and occasionally check up on your property. It is important to set clear expectations for anyone you involve with your rental business before making any contracts or agreements.
Ask for a comprehensive report of the condition of your property and land at set intervals, so you never fly your private plane back in to find a mess.
Hire a Property Manager
A property management company can fulfill all roles associated with tenant satisfaction and property upkeep. You will have to pay them a good amount of money, but it will absolutely be worthwhile if you choose one who knows how to prioritize, organize, and create productive bonds with your guests or tenants.
If this is the route you take, make sure you ask around for property managers with proven success, as well as ask all candidates questions pertaining to how they plan to not only maintain but improve your property.
