Becoming Property Manager
Becoming Your Own Property Manager
MilitaryByOwner Advertising, Inc.
As any military family can attest, a Permanent Change of Station (PCS) move is laden with tough decisions. If you happen to be a military family that has a mortgage with your name on it, this type of transition can come with a lot of anxiety. To sell or not to sell, that is the question. Holding onto your property during this depressed real estate market may be a desired choice, until you realize that this will entail you having to become a landlord.
There is a litany of things to consider when you embark on this adventure, and it is worth doing your research and due diligence in order to avoid many of the common pitfalls that can bestow landlords.
Taking the time to research your tenants and secure a legally binding lease agreement is paramount to your success. There will always be an element of chance when you choose to rent out your home, but hopefully the following information will help guide you along the way.
While there are many aspects of renting out your home that will happen simultaneously, there needs to be a starting point. Consulting the Federal Fair Housing Act and the State Fair Housing Laws for the stringent guidelines regarding rental practices is something that every landlord should take the time to review. You certainly want to keep the law in mind as you make your way through the process.
It is important to think ahead a bit when you are determining the terms of your desired lease agreement. What length of lease agreement are you willing to offer? Is there the opportunity for your tenants to renew after the initial lease expires? Will the rent include utilities, yard or pool care? What is your pet policy? What are your required security deposits and smoking policy? What date will your home be available?
Setting the proper rental amount is an important facet that requires thought and research. Several aspects come into play when making this decision to include the amount of mortgage payment, the existence of homeowner association fees, and the requirement for contracted maintenance. Research and common sense prevail in this department. Everyone is emotional about their home and the tendency is to believe that their home is worth more than what current market trends dictate. Take the time to look at homes for rent in your area and compare them to what you are offering. This will give you a reasonable idea of what your home can command.
Finding prospective tenants is where the magic happens. Marketing your home effectively may afford you the opportunity to screen multiple prospective tenants. With the widespread use of the internet and social marketing media, it is easy to market your home in a variety of creative ways. Of course, your first choice for advertising should be with MilitaryByOwner.com. However, we always advise our customers to market their home in a variety of ways. Consider other advertising websites, social network sites, and an ad at your local housing office. Spread the word within your current unit and to your family and friends. Include details about what you are included in rent (utilities, yard care, pool), local school information, and community highlights. Be sure to include photos of your home, as ads with photos on MilitaryByOwner.com are viewed 60% more often than those ads that do not include photos.
It is a common belief that if you are renting your home you do not need to be fastidious when preparing your home for tenants. If you are looking to make the rental process easier, then it is a good idea to use a critical eye and see what you can do to make sure you are putting your best foot forward. Cleaning and organizing is not only important when selling your home, it is also a method to attract the perfect tenant as well.
Begin the screening process by having prospective tenants fill out a rental application that authorizes you to perform a credit and background check and ask for a photocopy of their identification as well. The internet offers a number of sites that will run credit and background checks for a fee. Do not skip this critical step! If you do not want to incur the expense, you can require an application fee. Utilize references from previous landlords as well as character references, which can give you insight into your prospective tenant.
If opportunity allows, meet your prospective tenants in person, as face-to-face meetings allow you to get a feel for compatibility. As a second choice, an in depth phone conversation can help provide a bit of insight into this new relationship. Trusting your instinct is always a good rule of thumb.
Once the hard work has paid off and you have a tenant that is ready to sign a lease agreement, make sure that you have a state-specific, legally binding agreement that you have downloaded from a reputable website or that you have procured from a local entity. As a military owner, including a military clause that will allow you or your tenant to terminate the lease agreement in the event of receiving orders is another important detail to factor into your paperwork.
Tenants and landlords alike can benefit from a written code of conduct clearly stating what you expect from your tenants and your expectations for access to the property for the occasional walk-through. This avoids any confusion or discrepancies during the term of the lease.
One of the common fears of being a landlord comes with the unexpected maintenance costs that arise when you least expect them. A technique for managing this financial upheaval is to create a maintenance fund that holds an amount of your choosing.
The wonderful thing about military life is there is always someone who has gone before you. This is a perfect opportunity to utilize your military network and ask your friends and colleagues what advice they would offer to avoid the most common pitfalls of becoming a landlord.
Good luck on this new adventure!