If you're a homeowner moving with the military, you might be stuck between a rock and a hard place. You own a home in your current location and can't afford to sell, but need to buy a new home in your new duty station location.
The result? You're now an accidental landlord.
What You Should Know When Renting Out Your House
If you’ve just become an accidental landlord, there are five critical things you should know before renting out your home while you're living elsewhere.
1. Disconnect emotionally from the home.
Buying and leaving a home is an emotional experience. Chances are you love your home, especially if you lived there for a long time. That means renting to a stranger can feel really hard -- and could mean you find yourself too attached to the home for your new tenants' liking (and their privacy rights).
When you make the decision to rent out your home, you need to approach it as if you're selling your home. The new tenant has a right to privacy, unless you feel something illegal is happening or you give proper notice and reason to enter the home.
2. Perform a tenant background check.
This step is incredibly important for a few reasons. First, you want to pick tenants who will care for your home rather than trashing it in your absence. You can use tenant screening reports that are free for landlords to get a detailed background check on your prospective renters, including credit scores, eviction history and criminal records. The Landlord Protection Agency's tenant screening worksheet also provides some questions to ask during your tenant interviews.
Next, screening your tenants will help ensure that you don't get scammed. One such con allows squatting tenants to pay a deposit, never pay rent and count on you not knowing what to do or how to kick them out. Screening your tenant may help you avoid that kind of situation.
3. Know the rental rules for your state.
Tenant and landlord protections vary by state, so you need to tailor your lease or rental agreement to that state's rules. For example, states vary on how much notice you must give for renters to vacate, the maximum deposit you can collect, and rules on notifications for entrance to the property.
Those rules can be found on the LPA's website, or you can use an online lease agreement template to build what you need for your state.
4. Determine how much you should charge for rent.
It's easy to say, "OK, I have $2,000 in expenses, I'll charge $2,100," but the market doesn't work that way. If other comparable rentals in your area are priced below that point, you could have a hard time finding tenants.
As you get ready to set your price, look at other local listings in your region. If you're near a military base, factor in the current Basic Allowance for Housing rates for families that might want your home size or like your neighborhood. Pricing above what your home is worth in your specific rental market will leave it unoccupied longer, which can eat into any profit or breakeven point.
When you have your price set and are ready to market your rental property, list it on websites that serve your area, including Facebook marketplace and Craigslist. And when you do find a renter, make sure to collect a sufficient deposit of one month's rent.
5. Know your responsibility to your tenants.
If something breaks in your rental, you have an obligation and lawful duty to fix it, and immediately, if it affects the quality of life or poses a hazard. But if the tenant just wants something upgraded, that isn't a requirement.
That means you have to walk the line between having your tenant stay long term because you're easy to work with, and paying too much for little things. You can let the tenant make upgrades that they pay for if you wish. But other incentives could include smaller gestures, like giving $25 off rent if they pay five days early or by direct deposit or allowing them to paint interior walls if they choose. Small things can go a long way.
-- Dr. Danielle Babb (Dr. Dani) is an enthusiastic professor, speaker, consultant and author helping people achieve their passions and dreams through their work.
Keep Up with the Ins and Outs of Military Life
For the latest military news and tips on military family benefits and more, subscribe to Military.com and have the information you need delivered directly to your inbox.