As an absentee landlord, you’re unable to keep an eye on general maintenance, help prepare before a storm or even have a friendly face-to-face chat with the tenant who has fallen behind on their rent. Luckily, according to real estate expert Susan Thompson, there’s a simple solution at hand: hire a property manager.
While it might be an extra expense, selecting a professional you can trust will ensure your property is well looked after and keep your anxiety to a minimum as you go about your life in another country.
“It’s like anything – you have to put money into it, to get something out of it,” said Ms Thompson, an agency manager at Coldwell Banker Bermuda Realty. “Property in Bermuda is very expensive. If you own property, you want to be able to protect that investment.”
“Property management is 10 to 15 per cent of the rent, so it is expensive, but they’re there to make sure the rent is paid; they chase up arrears; they can go to court for you; they check the property a couple of times a year to make sure it’s up to standard; they give recommendations on what needs to be replaced or fixed.”
They’re your eyes and ears in your absence, in other words.
Ms Thompson said Bermuda seems to have seen an increase in absentee landlords as growing numbers of locals have sought pastures beyond our paradise island.
“I can’t put a percentage on this but there seems to be a larger number in recent years,” she said. “There are many reasons, but I would suggest the high cost of living in Bermuda and the quality of life seem to be reoccurring factors.”
This can potentially lead to multiple problems for both the tenant and the landlord.
“If the property is not managed by a company or person locally, this causes major issues with tenants getting problems corrected,” Ms Thompson said.
“From the landlord’s end, they are unable to ensure if the tenants are keeping the property in good condition, paying rent on time, abiding by the lease – whether it be the number of people living in the property, keeping pets, using the property as intended or getting tenants evicted if necessary.”
“If you’re going to be an absentee landlord you need to ensure you have a dedicated person to take care of the problems that arise – because there will be problems that arise, no matter if the property is brand new or 50 years old or 100 years old.
“If you want to test anything out, bring it to Bermuda, we all know that!”
Ms Thompson explained that Bermudian properties tend to become derelict very quickly if they don’t receive the necessary care.
“It’s an investment so you need to ensure that somebody takes care of it,” she said. “Some tenants are easier than others; some landlords are easier than others. When you get personalities involved, these things can cause issues themselves depending on how they are handled or not handled.”
DO: Get your property manager to stay on top of these tasks:
• Hurricane preparation. It’s a stressful time for everyone – and it’s even more worrying when you’re not around to help board up windows, check whether the roof has holes, or the trees have loose branches that might break off and become a danger. There’s no guarantee your tenant will have the skills to handle everything, but a good property manager will see the job through.
• Dealing with storm damage. From broken windows or parts of a roof that have blown off, to fallen trees or downed electrical wires, there’s bound to be debris. You can’t just expect your tenant to deal with whatever might happen, but the property manager should be able to.
• Yard maintenance. Absentee landlords sometimes fall short of landscaping requirements, which can lead to overgrown hedges and lawns. Hire a regular landscaping firm, either directly or through your property manager.
• Emergencies. Regardless of your property’s age, you can still have leaks, damage from mould or dampness, break-ins or broken appliances. The tenant needs to be able to contact the property manager to deal with issues as they happen.
• Cleanliness. If you don’t keep your Bermuda home clean, you’ll end up with infestations of cockroaches, ants or rats. Ensure the property manager schedules visits so that you know the tenant is maintaining good standards of hygiene.
• Abiding by the lease. Your property manager should carry out inspections to keep an eye on whether the tenant is keeping pets, allowing extra people to stay in the property or using the building for other purposes.
• Rent. Tenants who fall behind may evade contact with an absentee landlord. Your property manager should deal with these situations.
• Communication. Being overseas is no longer such a large barrier to communication – you can use Zoom to build a relationship with your tenants as well as the property manager.
DON’T: It’s a mistake to expect your agent to stay on top of your tasks.
Ms Thompson said: “Agents are hired to find and place tenants. That is what they are paid for, they are not property managers and should not act as property managers. It only confuses the issue.”
“Property managers and property management companies are paid to manage the property.”
Advice for tenants
• If you have an absentee landlord who is not dealing with a problem, contact Consumer Affairs for advice or hire an attorney.
• When it’s an emergency, take photographs and deal with the situation yourself if you can.
• Notify the landlord as soon as possible and ensure the people that have been hired to correct the situation write a report about it, with the invoice. The invoice can be paid by the landlord, or the tenant can be reimbursed for out-of-pocket expenses.
Advice for Bermuda-based landlords with property overseas
When you live thousands of miles away from your property, it’s not always easy to stay on top of things. First, make sure you know the laws, which vary from country to country. Second, hire a property manager!