Part III: Property Management, Going Mobile, and Moving to Your Destination

 

All right, so you've started working on building your Absentee Landlord empire, and by empire we mean a few rental properties. You can start to picture that white beach in Costa Rica a little more clearly, but there are still some pieces missing from the puzzle.

Property Management 

You need a property management company, to keep an eye on your rental units, field phone calls from tenants, repair broken pipes, and screen new tenants. Most property management companies charge a commission of total rent collected, which is one very good reason why you only want a few rental units, with minimal expenses on each. Generally speaking, property management companies charge between 5-10% of gross rent collected, but this is often a flexible figure, and negotiable. If you can secure a good property management company at 7%, you'll be good to go.

 

This will free you from any obligations to the rental units, other than simply paying your bills (real estate taxes, hazard insurance, etc.); this is the first step in going mobile.

 

As you begin to achieve your target monthly cash flow ($3,000 in our example), it's time to start looking into actually moving to your Absentee Landlord Destination. You've probably already picked out a general area you want to live (such as a specific beach-side town in Costa Rica), but now it's time to actually go in person, and start checking out specific properties. While you're there, be sure you check on infrastructure, such as cellular service, internet, clean water, electricity, etc. in the property or neighborhood you're considering. As a final note, internet access is far more important than phone access, as you can use a headset plugged into your computer to make cheap international phone calls through services like Skype and Jaxtr.

 

Going Mobile & Reframing the Concept of Success

Don't think too extravagantly, as you're on a limited income. Location, infrastructure, and safety are the most important priorities; size and luxuries are secondary. Who cares if you live in a little bungalow, if you overlook beautiful sunsets on a Costa Rican beach? As we discussed in Part I, the Absentee Landlord lifestyle is not about glitz and glamour, it's about living your dreams independently of having to work.

 

It is entirely possible to lead a very comfortable and rewarding life on very limited income, especially if you spend the time to do your homework. Don't go to a big-shot real estate agent who caters to "rich American expatriates," but look into a long-term sublet of a furnished house, or go talk to the real estate agents the locals use. Buy local food at farmers markets; it will be less expensive and fresher.

 

Here's one thing you probably don't want to hear, but need to: you probably don't need or want to have a car in your Destination. America is somewhat unique in the world, in its emphasis on roads and cars as a requisite for transportation. Sell your car, and either sell your home in the States or have your property management company simply rent it out as well!

 

As a final piece of unwanted advice: get rid of most of your stuff. You don't need that table out in the garage, or that beanbag chair in the basement. Sell it, give it to charity and take a tax write-off, or lend it to friends or family if you really can't part with it.

 

Going mobile to become an Absentee Landlord requires a totally different state of mind than most of us Americans are accustomed to; it's about minimizing your STUFF (because you can't travel with a lot of junk), and maximizing your experiences. Forget the idea of compulsive consumerism, and instead buy one good laptop computer and one good surf board, or one good set of skis, or one good set of scuba gear. Where you're going, you don't need roads.

 

Links the Absentee Landlord Part I and the Absentee Landlord Part II

Online property management software through EZ Landlord Forms

Currency converter

Having a hard time selling your home or real estate investment property? Or maybe you're a realtor who can't move any listings? Here are a few tricks to get the job done a little faster.

Trick 1: Prioritize the Kitchen & Bathrooms

By far the most important rooms in any house are the kitchen and bathrooms. These are what hit people on an emotional level; the rest may look good or bad, but it won't affect them beneath the surface the way the kitchen and bathroom will. Make sure these are modern, attractive, and most of all, clean!

Trick 2: Don't Forget the Landscaping

It's easy to get caught up in the presentation of the house itself, but remember that the first thing people see is the exterior. Keep the lawn mowed, the garden attractive, and the hedges or fences in good repair. As an aside, you'll also want to make sure that the outside looks clean (aesthetic colors, fresh paint, etc.).

Trick 3: Bribe Them with Style

 

Marketing gimmicks such as seller concessions (or "cash back") don't impress buyers; they'll just subtract it from your asking price to arrive at a net price. But if you impress them with stylish touches that are included with the real estate, they'll actually think they're getting something extra. This may include stylish appliances, or kitchenware like fancy knife sets, or electronics like flat-screen televisions, but whatever it is, appeal to their desire to be more stylish.

Trick 4: Pitch the Neighborhood, Too

Your real estate might be the nicest house on the block, but it won't matter if your buyers have concerns about the block itself. Make sure they know just how great your neighborhood is, from the little café down the street where the owner winks as he gives you an extra side order for free, or the smell of baking bread from the bakery on the corner, or the cute little dog park where their pooch can play with Lady and the Tramp. Tell them about the lack of crime, the great schools, and anything else you can think of to make them think your neighborhood is the best place west of Santa Barbara.

It's a tough time to sell real estate right now, but with the right approach, you can sell anything.

It’s hard to stop tenants from abusing your rental property, considering that they, well, live there, and you don’t. But landlords can still be pro-active, and get a head start on their tenants.

 

The Rental Application

An effective rental application is a landlord or property management company’s first line of defense. It will help you make an informed decision about your prospective tenants, and good ones include employment background, rental history, credit checks, and of course the ages of all tenants living there. Remember that you must safeguard this information to comply with federal privacy laws.

Landlord Resource: Free Rental Application 

Smoke Detectors

Cheap smoke detectors can eat through batteries and, in extreme cases, not function very well. Our experience has been that First Alert smoke detectors are the most reliable, with a 10 year lithium power cell, mute button, and tamper-proof design that meets code for sealed/tamperproof alarms.

Landlord Resource: Amazon.com Shopping: First Alert Smoke Alarm

Do-It-Yourself Exterminating

Exterminators aren’t cheap, and sometimes aren’t even effective. Consider preemptively striking with roach motels and rodent-proofing the property. Close gaps, cracks, or holes, make sure there’s no open food available, and if need be, place traps around the house.

 

Landlord Resource: DoMyOwnPestControl.com Shopping: Maxforce Roach Bait Stations

 

Landlord Resource: E-Bug.net Shopping: Rodent Control

 

Lighting

Wanted to go green for a while now and not gotten around to it? Here’s your chance. Pick up energy-saving compact fluorescent light bulbs and contribute to energy conservation as well as cost trimming.

 

Landlord Resource: Lamps Plus Compact Fluorescent Light Bulbs

 

 

There are a lot of tools out there for landlords, and here’s a link for more free landlord forms.