My husband and I bought our first home in 2009, while the housing market was no longer at its peak, but hadn’t hit bottom, yet. Knowing we’d be at our duty station for more than four years, we confidently bought a home, assuming we could save money and sell when it was time to PCS three hours north.
We received orders in 2013, prepped our house, and listed it for sale. We had a month of great traffic, several prospective buyers, and our well-laid plans seemed to be right on track.
Then, the government shut down.
We held out hope for a few weeks, but quickly ran out of options. Just like that, we became self-managing landlords. We know many other military families can identify with our not-so-unique story. If you’re thinking about renting out your property, perhaps you can learn from our experiences. Here are five tips:
Not every house makes a good rental
We had many concerns about using our home as a rental. Certain qualities make a properties less complicated to manage, like easy-to-maintain grounds, newer construction, community amenities. Our house is uniquely charming, beautiful, and comfortable, but it is also older and tucked in the woods. Fortunately, its unique appeal makes up for its quirks. And it’s close to several bases, upgrades, and military-friendly neighborhoods. It’s important to highlight those types of qualities when you’re advertising your property to find the right tenants.
Think strategically about placing tenants
When I decided to self-manage the property, I also decided to find my own tenants. There were many things to consider, such as a pet policy and length of the lease, when choosing renters. I carefully followed the laws of the state and used AHRN.com to pick the people I thought would be the best match based on financial background, calls to former landlords, and their desired length of lease. At the end, I lowered the asking rent $50 to accommodate the family who is the best fit and poses the lowest-risk.
Document property conditions thoroughly and keep an excellent inventory
Thoroughly documenting and inventorying your property’s conditions before, and between, placing tenants is extremely important. We took photos and video throughout the home, and put everything in writing in the tenants’ condition form. I then encouraged them to be equally thorough, and welcomed their excessive notes about every little ding and scratch after the walk-through. This step allowed the tenants to take a great deal of personal responsibility for the condition of home before and after their stay, and gives me the paperwork I need to take care of the home from afar.
If you’re self-managing, put your emotion aside… most of the time
In most circumstances, especially as a self-managing landlord, you have to be prepared to make every decision in the name of finances and business. However, I quickly learned it’s not so cut-and-dry. Our first set of renters stayed in the property for only three months before an extremely emergent personal issue led them to request a release from the lease. Had this strictly been a business decision, I could have held them to the terms of the contract until the last possible moment. Or, I could try to find new tenants and quickly release the current tenants from the lease. We absorbed some moderate costs for quick turnover, but I can also sleep at night without feeling guilty.
It’s not the end of the world
It’s also not without risk, but for my family, being unintentional landlords has been going relatively well. Keeping my emotions in check, finances in order, backup plans ready, and support system in place, we’re hopeful we can either move back into the home in a few years, or sell it without losing too much money when the time is right.
Want five MORE tips to help you navigate your Landlord title? Head over to AHRN’s blog and take some notes!
Posted by Kristin Beauchamp, Military Spouse and Digital Marketing Manager, Red Door Group