When my husband and I purchased our first home we saw the house as an investment. Yes, we obviously were going to live there while at our duty station, but when we moved in a few years?
I have 3 little words: Rent it out.
If you have PCS orders and know that you want to rent your home, here are 6 things you need to do now to prepare to be a landlord this summer.
If you want to rent your home, you will want to…
Save money. Whether you decided to rent it out because of the current housing market or you’ve been planning for years, save, save, save your money. Why? Well, you’re going to have a few costs.
For one, you’re still responsible for your mortgage whether or not someone is living in your house, so you’ll want to have some funds built up just in case your house is empty for a period of time.
Two, you need to prepare your house for a renter. That means getting it professionally cleaned and doing any repairs.
Third, if you’re planning on using a property manager, they will require payment for their services to find you a tenant.
Finally, you will still be responsible for general maintenance and HOA fees on your rental so you’ll want some buffer when something does arise.
Make a plan. I recommend hiring a property manager, especially if you are moving far, far away or don’t have anyone nearby to help with screening tenants, handling maintenance requests and dealing with any other issues that may arise. You can also choose to hire someone for just a part of the process.
One of my friends lives near their rental property and only hires a property manager to screen and place tenants while they handle all maintenance issues themselves. If you have family or a reliable friend nearby that you trust to take care of things, that’s an option.
But remember – as a landlord you must follow local, state and federal laws regarding housing. This means ensuring that you don’t discriminate while screening tenants and that you take care of essential maintenance (like water outages or electricity issues ASAP).
Also, think about worst case scenarios – what happens if you need to evict your tenant? Do you know the proper procedures? Can you handle it from another state or country? These are all things to think about when deciding to rent your home.
Do market research. Start checking out what other rental homes in your area are charging for rent.
- Do they allow pets?
- Is their home new or need some upgrades?
- Do they provide a washer and dryer?
This will help you figure out what you’ll rent your house out for and what you may need to do to get your home ready for renters.
Interview property managers. As I said before, I personally recommend hiring a property manager. They know the ins and outs of the laws of your state in regards to tenants and are experienced in dealing with maintenance issues and evictions. Ask your friends who rent who they rent from, do some Google searches, and even ask in local Facebook groups if people have recommendations.
Then call them and ask questions. What do they charge for their services (around 10% of the rent is average), how they deal with maintenance and evictions, who you’ll be dealing with from afar.
Remember, this person will be responsible for taking care of your home when you leave and you want to be comfortable with their ability to do so. Think of this as a job interview and you’re the one hiring. Ask those tough questions and follow up if you think of something else. They should be willing to answer you, they want your business.
Also, don’t be afraid to negotiate with them. My husband and I asked one team if they could match a lower rate of another company, they never got back to us, so they lost our business.
We also asked our property manager to list our home at a slightly higher rent, they reluctantly agreed if we would come back down on the price if the home wasn’t rented in 30 days. Guess what? Our home was rented at the rate we wanted within 2 weeks of us moving out.
Change your insurance. Call your insurance agent and tell them that you will be renting your home out. They will be able to help you update your policy to protect your investment from your renter and any disaster that could strike.
Stay calm. The property manager is hired. Your house is clean. The home is listed for rent. Now is the hardest part – waiting for a renter.
Our home was listed just before the movers arrived. We had people walk through even mid-pack but no one was set before we started our drive to our next duty station. I was nervous and then while we were in the middle of nowhere Utah with barely any cell service we got a call, responded to an email and picked a renter! YAHOO!
Our renter moved in our house about 2 weeks after we moved out. It felt like it took forever but it was so worth it in the end.