The Surprising Secret to Owning a Rental Home in the Tropics
If you’ve settled on the place you plan to live in retirement and haven’t yet made an offer on your dream home, then what are you waiting for? Not only does owning a home in the tropics mean that you have a place to stay whenever you come down to visit, it’s also a great retirement planning strategy.
Buying a home that can also serve as a rental property when you’re not using it, is a great way to help the home pay for itself. It may even be another way to generate income to help you live even more comfortably in retirement.
But while owning and renting out a home in another country may seem like quite a challenge, it’s one that can be easily managed. Literally, in this case.
When it comes to rentals in the tropics, the services of a qualified rental manager or management company can be priceless. From making sure your property stays booked to getting repairs made in a timely manner, here’s how to make sure your rental manager will make, not break, your experience of owning a rental property in the tropics.
Find the person before the property
Rental managers know better than anyone else what are the most sought-after locations for rentals in the cities where they operate. They also know which types of properties rent the best and what kind of renters you can expect to attract.
As such, they can be just as helpful in finding you the right property as they will be once it’s ready to rent. So, if you plan to buy a property to rent, your rental manager might be a good person to have on your home buying team.
Just as the right rental manager can be the key to your property’s success, hiring the wrong one can be an absolute disaster. So, how do you know which management company to choose?
You can start by asking for recommendations if you know any other expats or property owners in the area. Try consulting expat forums focused on your town. Find out who’s happy with their manager and who isn’t.
Also, don’t underestimate the effectiveness of a basic online search. But don’t just type “rental managers in Nosara, Costa Rica.” Search the way your target audience would.
For example, if you’re wanting to market your Panama City condo to local business professionals who might stay more long-term, try searching “departamentos amoblados Panama City.” The top listings you see for furnished apartments are the same ones your prospective tenants will be seeing as well.
That’s not to say you should hire the first company that comes up in a Google search. That’s just a place to start. It’s absolutely essential to research and thoroughly vet any potential candidates, and even interview a few, before making such an important decision.
Iron out the details
Once you’ve found a rental manager you’re comfortable working with, the next step is to agree on their duties for managing the property, as well as how they’ll be paid for their services. So, before you sign any contracts, make sure every detail has been covered.
At the very least, your rental manager will be responsible for marketing the property, screening potential renters, handling check-ins and check-outs, collecting rent and deposits, scheduling cleanings, and inventorying contents for damaged or missing items. But they may be able to do more.
Find out if they’re willing to enforce any restrictions you want to impose (e.g. no pets or smoking). If they handle property management, they may also be able to handle items such as overseeing property maintenance, paying utility bills, or even taking care of the taxes on the property.
Don’t let out of sight be out of mind
Even though a qualified rental manager can be more than capable of effectively managing your rental property, don’t blindly assume that no news is good news. Check in regularly with your management company to make sure things are running smoothly.
You can request that they submit monthly statements showing any income and expenses for your property. They should also be able to produce receipts for any maintenance performed, items replaced, or bills or taxes paid.
It’s also a good idea to come down as often as possible to check things out for yourself. Pictures and statements are great. But there’s no substitute for seeing the state of things with your own eyes. Plan to meet with your rental manager to speak personally about how things are going and discuss any changes that need to be made.
Not only are frequent visits a great way to keep things in tip-top shape. They’re also a good excuse to take a vacation and start building up your anticipation for retirement, in your tropical dream home that’s now paying for itself.