Managing rental property out of state: a long-distance landlord guide

Maybe you moved for a job and kept the old house. Maybe you inherited a duplex three states away, or bought where the numbers worked better than at home. However you got here, you now own a rental you cannot drive past on the way to work. This guide covers how to run it well from a distance.

Most small rentals are run by their owners, not by management companies. According to the Census Bureau and HUD's 2021 Rental Housing Finance Survey, 70% of small (one to four unit) rental properties are owned by individuals, and only about 22% of small properties are professionally managed. Long-distance self-management is common. It just takes more setup up front.

First decision: manage it yourself or hire a manager

If you interview managers, ask how they approve repairs and whether they mark up contractor bills, how quickly they pay you, what you get in a monthly owner statement, and how they handle a late payment. If you self-manage, the rest of this guide is your checklist.

Collect rent online only

Checks mailed to your home address, or to a friend in town who deposits them for you, are the weak point of long-distance landlording. Make online payment the standard way to pay, and say so in the lease.

Set up a monthly recurring invoice with the due date from the lease. Let automatic reminders go out before and after the due date. Apply the late fee your lease allows automatically, so it happens the same way every time instead of depending on whether you noticed. The tenant pays by bank transfer or card, and the money goes to your bank account without anyone handling paper. If you own more than one property, it can help to have each one pay out to its own bank account so the books stay separate.

One catch: a handful of states do not let a landlord make electronic payment the only option, so you may need to accept a check or money order too. Check the online rent payment rules by state for the state where the property is. If a check does come in, have it mailed to an address you trust and record it against the invoice so the ledger stays complete.

Build a local contractor bench

The question is not whether something will break. It is who answers the phone when it does. Before you need them, line up:

• A handyman for small jobs, plus a backup.
• A licensed plumber, electrician, and heating and cooling company.
• A locksmith and a cleaner for turnovers.
• Lawn and snow service if the tenant is not responsible for it.

Ask local agents, neighbors, or other landlords in the area for referrals. Agree on how each contractor will send photos and invoices. Set a dollar amount they can spend on an urgent repair without waiting for your approval, and put it in writing. Have tenants submit maintenance requests online with photos, so you can see the leak before you decide who to send.

Keep a W-9 on file for each contractor. Depending on what you pay them, you may need to issue 1099s at year end; your tax professional can confirm.

Inspections without the plane ticket

You still need eyes on the property. A few ways to get them:

• Move-in and move-out. Have your local contact or manager do a full walk-through with dated photos and video of every room. These records matter when the deposit is returned.
• Periodic checks. Once or twice a year, with proper notice, have someone walk the property. Look for leaks, filter changes, smoke detectors, and unapproved pets or occupants.
• Video walk-throughs. For a quick check, ask the tenant to walk you through the home on a video call at a time that suits them. Many tenants are fine with this, and it is a good way to see a problem they reported.
• Drive-bys. A friend or contractor who is nearby anyway can tell you if the yard or roof looks wrong.

Entry notice rules come from the property's state, so follow them for in-person visits.

Follow the law where the property is

This is the mistake that catches long-distance landlords most often. Landlord-tenant law comes from the state, and sometimes the city, where the property sits, not from where you live. That covers security deposit limits and return deadlines, late fee rules, entry notice, rent increase notice, and the eviction process. Some cities also require rental registration, and some ask for a local contact person.

Start with our guides to security deposit laws by state and late fee laws by state, then confirm with the state and city. This is general information, not legal advice.

State income tax where the property sits

Many states tax rental income from property located there, even when the owner lives somewhere else. That can mean filing a nonresident return in the property's state as well as your usual return at home, and your home state may offer a credit for tax paid to the other one. Every state handles this differently, and some have no income tax at all.

On the federal side, rental income and expenses for most individual owners go on Schedule E. See our Schedule E guide. This is general information, not tax advice, so talk to a tax professional, ideally one who knows both states.

Let family help without handing over your password

A lot of long-distance landlords lean on a sibling, an adult child, or a friend near the property. Sharing your login with them is a bad habit: you lose track of who did what, and they get access to everything, including where the money goes.

A better approach is separate logins. Each helper gets their own sign-in with a role that matches the job, such as handling maintenance only, or seeing everything without changing anything. You keep control of the parts that matter most, like payout bank accounts and billing.

If the property is co-owned with family, the co-owners can get owner statements, so they see what came in and went out without needing access to your account. Our guide to owner statements explains how they work.

How RentMerchant fits

RentMerchant handles the rent side of long-distance landlording. You set up a monthly recurring invoice for each tenant, and it goes out on its own with reminders before and after the due date and an automatic late fee if your lease includes one. Tenants pay online by bank transfer or card, and each property can pay out to its own bank account through Stripe. If a tenant pays some other way, you record it against the invoice so the ledger stays complete.

Tenants submit maintenance requests with photos, you can keep a list of contractors and assign them to jobs, and expenses roll up into reports and a Schedule E export. Staff logins with roles (Manager, Leasing, Maintenance, Accounting, and View only) are part of the Pro plan; payout setup, billing, and account settings stay with the account owner.

The Free plan covers up to three properties with unlimited units. Create a free landlord account and set up your first out-of-state rental.