Post from MilitaryByOwner
You’re due to PCS soon, and you’ve decided to rent out your home for one of several possible reasons: you’re keeping it as an investment property, you hope to return to it later, or you don’t have enough equity in the home to turn a profit if you sell right now.
Whatever your reason, there are some things to do before placing that "for rent" ad. Begin with this quick list, and then visit the extensive landlord/property management resources at MilitaryByOwner for more information.
1) Research and understand the legalities
Familiarize yourself with your state’s Fair Housing laws, as well as the Federal Fair Housing Act at HUD.gov. This law protects buyers and renters from being discriminated against during real estate transactions.
While you may be familiar with the idea that you can’t (whether purposely or inadvertently) make decisions regarding selling or renting housing based on race, color, religion, national origin, sex, disability, and familial status, it’s important to note that, though you may mean well, you also cannot advertise your home with wording like "childless couples preferred" or "looking for military members to buy home." For more detailed information, see Understand the Fair Housing Act When Listing Your Property.
2) Decide — property manager or DIY?
Before you get too far in this process, decide if you’ll use the services of a property manager for tasks like screening tenants, securing a lease, communication with tenants, and maintenance of the home. Using a property manager can be an especially appealing option for long-distance landlords like you’ll probably be. A typical fee from a PM averages between 8-12% of the monthly rent collected.
Still, it is possible to manage the property yourself from a distance, though it’s advisable to have a local contact in case of emergencies. And be realistic about how that will look-- for instance, if you’re in a different time zone, will you truly have the capability to respond to tenant needs like you’ll need to?
3) Put the property’s best foot forward
Tenants are looking for move-in ready, clean homes. Some updates to pay attention to:
- Remove/replace old carpeting
- Adding hardwood or engineered wood flooring
- Repainting in neutral tones
- Bathroom/kitchen updates
- Fix small repairs you may have overlooked, such as:
- Leaky faucets or showers
- Running toilet
- Holes in drywall.
After repairs and maintenance have been completed, clean the home like it’s never been cleaned. Prospective tenants will open every closet door, look in garages and storage areas, and inspect appliances.
Of course, there’s always paperwork involved. If you’re using the services of a property manager, they’ll handle much of this step for you. There’s so much to cover, but here’s a partial list of things you’ll need to set in place.
- Converting your homeowners insurance to a landlord policy
- Tenant screening (SmartMove is a great resource for this)
- Home warranty paperwork
- Log of income and expenses for maintenance and repairs
- State-specific lease, including:
- Military clause and reverse military clause
- Requirement of tenant purchasing renters insurance
- Monthly rent and what’s included (any utilities, etc.)
- Guidance for cosmetic changes the tenant may wish to make
- Pets allowed, pets upon approval, or no pets
- Landscaping service provided or tenant responsible for landscaping
- Parking permit provided or tenant is responsible for parking permit
Make the task of setting up a lease agreement easier with downloadable rental leases and other legal documents from US Legal Forms.
5) Think like a tenant.
It’s go time! Take a final walk through the home and look at it through the eyes of a potential tenant. Better yet, have a friend walk through and give you their honest assessment. Some other information you can leave behind to help create the best experience for your renters:
- Owners manuals
- A "rental binder" highlighting amenities — include takeout flyers or info about local stores and restaurants
- Information about filter changes for the HVAC and possibly appliances such as the refrigerator
- Property manager or your contact number and email
One of the best things about military life is that there’s usually someone who’s gone before you. Military families have rented their homes long distance for years, and you can, too!