After selling my very first rental unit in Paris, I now only own three properties and am a successful landlord: a three-bedroom apartment in the U.K., a guest house in Guatemala, and a house I built for myself a mile away from the guest house.
I haven’t set foot inside the U.K. rental for four years, and I am often out of Guatemala, traveling for months at a time. Yet it all works out.
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Monitoring Rentals From Afar
For the U.K. rental, I have a considerable advantage: I lived in the property with roommates for a year before I relocated abroad. That means I know the place inside and out. When the tenants talk about a faulty heater, I know who to call or where to get help.
As with the old plumbing, things go wrong with the tenants, too. So my solution has been to filter applicants thoroughly. I place my rental ads with good quality pictures and a full description of the place, as well as what I expect the tenants to be responsible for – cleaning, visitors, noise, etc. I have priced my place slightly below market rates, so I can afford to be picky with tenants.
When I have two to three people who I feel would be a great fit, I ask the current tenants to conduct a visit, and a small interview of the applicants. During that time, they find out whether they’d get along or not.
By involving the current tenants, I get fewer complaints down the road, because if they picked the wrong person – well, that’s on them.
Then the applicant wires me a deposit and the first month’s rent. I get a sense of their financial status to see that they wouldn’t walk out in the middle of the night.
I also split all common bills equally among the tenants. Having lived in shared houses myself, I found out splitting the bills was a source of tension. The last thing I want as an absentee landlord are tenants leaving me with outstanding bills.
So far, it has worked perfectly and I've become a successful landlord. The three bedrooms in the house are rented to three different people. I have a high occupancy rate that could turn any hotel chain green with envy. Over the last five years, one room remained empty, just for a week.
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The Perfect Landlord-Tenant Relationship
A landlord-tenant relationship is a two-way affair. I only raise rents for new people moving in. Some have stayed on for three years without having to pay more. I answer their queries by email within 24 hours. If something breaks, they let the plumber or electrician in, send me the bill, and I pay promptly. They even painted the place themselves – I only paid for materials.
I am also very fair when it comes to giving back deposits. Since I can’t be there to inspect the place, I just give it back, unless another tenant informs me about damage. Fingers crossed, that hasn’t happened. So I guess they tell each other that I am a decent landlord. They, in turn, are respectful of the place.
Sure, I get a little less money. But the cost of a trip over there to move people in and out would be more expensive than two months of rent.
When it comes to my guesthouse in Guatemala, I am lucky enough to have staff that helps me be a successful landlord. I manage all inquiries and bookings online via Airbnb and other rental sites. Then I warn my housekeeper and handyman that people will be coming over.
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The housekeeper offers meals to my guests and makes a little extra money on top of her salary. Again, I could make more by handling everything myself. But that is the price I pay for freedom and peace of mind.
If you buy a rental without hiring a property manager, make sure it’s a good investment.
I run my properties in a hands-off manner. If you are the type who wakes up in the middle of the night worrying about your tenants or the plumbing, I would strongly urge you to stay well out of this business.