How To Succeed as a Long-Distance Landlord
This series of articles is about the experience I gained from managing my rental houses from overseas.
I would say that I have successfully implemented a set of investments, decisions, and plans that allow me to enjoy being overseas and still take care of my houses without the need for a realtor or a management company.
Now I am not saying that having a real estate company or a management company is bad, and I interviewed multiple property management companies before I left America. However, ultimately, I personally decided not to pursue that avenue.
How did I become an overseas landlord, you ask?
First of all, let me tell you: If you had asked me three years ago if I ever wanted to be a long-distance landlord — meaning I can’t reach my houses within a 30-minute drive or see a maintenance issue firsthand before calling a handyman — I would have told you that would never happen.
I was one of those very hands-on landlords that wanted to know, see, touch, and solve every problem myself and be aware of every issue with my rental houses.
But one day I came to realize that I was so busy with my rentals that I was missing the fun part of life, including watching my beautiful daughters grow up. I realized that my houses were no longer working for me, and instead, I was working for my houses.
It just so happened that divine intervention took place, and I was offered the opportunity of a lifetime to take my family overseas for five years. While I struggled at first with what that meant for my houses, I decided that I owed it to my family to make this change.
That is why I am now here overseas but still managing my houses across the Atlantic.
A new direction
Since coming to Europe, I have had the worst repair issues, including having the main water line burst twice in two different houses, multiple tenant turnovers, and a police raid at one of the homes.
Even through all of these, I managed my way through these difficult situations and still kept all of my houses profitable.
The bottom line is that I want to share my story, the plan I put in place, and the lessons I have learned so far being an overseas landlord. So learn from my successes, mistakes, joy, and tears so that you can decide on your own if overseas landlording is the right decision for you.
What kind of rental house is ideal for a long-distance landlord?
Today I want to cover some general tips for those of you that want to pursue purchasing a house and eventually becoming a long-distance or overseas landlord. If you are thinking of buying your first investment property, these are things you need to consider to ensure you are successful with your rental business. They are critical if you want to manage your houses successfully from a distance.
1. Buy houses in a very desirable location.
The good old saying “location, location, location” rings true when it comes to how fast you can rent out your property. If you want to be a successful overseas landlord, you need to make sure you find that desirable location in your town that everyone wants to flock to.
It is more difficult to rent out your house from a distance, so the more desirable your property is, the easier and faster it will be to rent out.
2. Buy a house that earns you positive cash flow.
I’d rather pay a little more and buy a house that earns positive cash flow (i.e., put more in the down payment) than buy an undervalued house with poor cash flow.
This is another key contributor to how successful you can be as a long-distance landlord. Let’s face it, being a long-distance landlord, whether you have a property manager or not, will cost money.
Having a positive cash flow really changes your perspective when it comes to a big repair expense. It’s the difference between “Hey, my rental income is covering my cost!” and “Oh man! This house is such a cash drain, and now I have to pay for this repair with my own money again!”
Putting yourself in the latter situation will burn you out in the long run, and you will most likely sell your house(s) due to a bad landlord experience. That is why being cash flow positive is a huge factor to being a profitable long-distance landlord.
3. Buy your houses as close as possible to each other if you have multiple real estate properties.
The reason you want them to be closely grouped is that you want to have scale with your suppliers such as lawn maintenance person or HVAC technicians.
If you have five houses all 10 miles apart from each other and you have a lawn maintenance person running one house to another, it's not good for that lawn maintenance person.
But if your lawn maintenance person lives right next to all your rental houses and you give him business on multiple rental houses, guess what? You just might become his number-one customer, and he will treat you that way.
4. Buy houses that are easy to maintain.
The less maintenance needed, the less the cost and headache when you are not around. If you can take care of the known maintenance and repairs before you move, I say be proactive and take care of it before you leave.
The best houses to buy with regard to easy maintenance and few repair needs are newer, smaller houses with small yards. Newer houses typically have fewer structural repairs and surprises than homes that are 50 to 60 years old.
However, do not be afraid of repairs and maintenance if the deal is right! After all, if you are able to buy a house that generates significant cash flow, your repair and maintenance costs will just be the occasional expenses that you have to incur to run your business anyway.
More tips to follow
Don’t worry, I will have lots of other tips for you on how to succeed at being an overseas landlord in my next article. Until next time, I hope I have given you excellent insight into being a long-distance landlord.