Buying a property in the United States is enticing to many investors across the globe. This may be due to lower property prices on average in comparison to the rest of the world. Others may want to diversify their investments or portfolio of real estate property. Property in the United States also tends to offer high ROI in the form of monthly rent checks and low taxes when compared to other countries.
Some may have bought real estate remotely, others may have physically visited and bought real estate in a more traditional way. Regardless of the way the property was purchased, after the time-consuming process of buying a property is over, the next challenge is to manage it.
Managing a property remotely can be a hassle at times. Not being physically close to your investment property can be a bit more stress-inducing, especially if things need your attention. A cool head, being organized, and these tips may help.
The Local Property Market
Keep your eyes on the local real estate market. This can help you as an investor and landlord track the value of similar properties in the region. Evaluations tend to be based on similar properties in size and scope. As such, it could help you understand the ballpark range of your property’s current market value.
Keeping an eye on the local market can also help you understand the average rent for the type of home you own. You can then adjust the rent accordingly when the rent contract ends.
Property Manager
Hiring a property manager can save a lot of headaches and reduce stress from managing a property. A good property manager will screen tenants, maintain the property, juggle the budget, set the rent, and collect it. Hiring a property manager will also cost roughly 8-10% of the rent checks they collect.
While it is recommended that as an international investor you hire a property manager, a smart investor will also check what they are up to. As the Russian proverb goes, “Trust but verify” so keep track of your property manager. Trust is essential, but blind trust can lead to problems. Make sure you aren’t getting charged extra for repairs, management fees, that the home is well maintained and that rent is close to the average in the region.
Collect Your Rent Checks
While usually, a property manager will take care of this for you, if you don’t have one, it’s best to automate the process as much as possible. Set up a local bank account near the property and consider what options work best for you.
The old-fashioned way is to receive checks via mail and deposit them when received. There are plenty of other methods in the digital era we now live in, however. This includes payment apps like Venmo, Paypal, and digital bank transfers. There are also online payment methods dedicated specifically to rental payments such as Apartment.com payment feature. Last but not least, you can make sure your property manager handles it.
Local Service People & Handymen
Knowing good plumbers, electricians, locksmiths, and carpenters can help if there is ever an issue. Being on good terms with them can at times lead to better pricing and more care and effort put into a job. Having the details of a handyman can also help you understand the general costs of typical home repairs.
While the property manager will generally handle this for you as a landlord, knowledge is power. Moreover, it can also help you save cash at times.
Visiting the Property & Inspections
Every real estate investor should periodically visit the investment they own. By doing so you can see the home with your own eyes, meet the property manager & tenant, and even be there while a routine inspection is underway. As routine property inspections are highly recommended and very important, you might as well be there physically. That way you’ll know if any repairs are needed. This will also help you understand the benefits and drawbacks the property may have.
It will also help you develop a better relationship with your property manager and tenant.
Maintenance
Every property needs some tender love and care occasionally. Should an inspection notify you of any fixes that need to be done, it is best to take care of them quickly. By doing so you generally save yourself from the problem potentially getting worse. This can include fixes to the HVAC systems, roofing, structural repairs, and more.
Maintenance is usually done every few years or so depending on the type of home. A well-maintained estate usually has a higher valuation than a neglected one.
Know Your Neighbors!
Getting to know your neighbors is always a good decision. They can keep you informed on what’s going on in your property’s neighborhood. This is especially handy if there are any major events such as storms, earthquakes, or tornadoes in the region. A neighbor can also help keep an eye on your tenant and make sure they are normal run-of-the-mill people.
Home Warranty
A home warranty and home insurance may sound similar but are quite different. Home insurance covers the home and the possessions within it from damages in certain circumstances. A home warranty will offer discounted repair or replacement for essential components within the property if something goes wrong. This can include plumbing, electrical systems, heating, and air conditioning, pools, and even electrical appliances.
A property investor should either consider a home warranty or set up an emergency fund on the side.
Insurance
Insurance is not only required by many mortgage lenders when buying a property, it is usually a good thing to have. As mentioned previously, it covers a home and its content when physical damages occur. This can be the result of fires, disasters, and in some cases flooding, although that depends on the insurance coverage.
Depending on the location of the property, sometimes specialized insurance is needed. This includes hurricane insurance in Florida, earthquake insurance in California, and flooding insurance in places like Louisiana.
Homeowners Association
According to the statistics, one out of five properties in the United States is managed by an HOA. This is more common with apartment buildings, gated communities, and condos, but sometimes certain neighborhoods have an HOA. The homeowners’ association maintains all common ground shared by the residents. They charge fees which can vary pretty wildly depending on the property and common ground.
If the home or apartment is managed by an HOA, paying dues on time is very important. In some extreme cases, if not paid the HOA can place a lien on the home.
Documents & Staying Organized
One of the largest struggles many have in life is staying organized. This is even more important when owning property. Storing all of the documents securely in one place both physically and digitally as a copy is recommended.
This can be:
- Receipts from expenses such as maintenance work
- Former tax filings
- The tenants’ application
- The lease agreement
- Background checks
- Inspection reports
- Correspondence with the tenant
- References
- Credit reports
- Move in & move out checklists
An organized investor usually has fewer headaches when tax season pops up. Generally organized investors tend to be more profitable on average too. Keep these tips in mind if you own a property in the USA. If you are looking to purchase a property in the United States, check out our different financing options tailored for international investors.