The Military Landlord

There comes a point in almost every military family’s life where they think, “Should we sell this property, or turn it into a rental?” We know because we’ve been there, done that. And while becoming a military landlord and owning a rental property isn’t easy, it can be done.

If you’re at a point in your life where you need to decide whether or not to become a military landlord, you’ve come to the right place. Since we’ve got years of experience in owning and managing rental properties, we decided to spread the love and created a Military Landlord Guide, for prospective landlord just like you.

We’re not going to lie, the download is long. So if you’re looking for a quick overview of the entire guide before you dive in headfirst, keep reading. And before we go too far, we just want to let you know that this is advice from our own experience. We recommend you always consult your state laws and appropriate professionals as necessary before making any decisions.

Now on to the good stuff! Below are the steps you need to follow in order to become a military landlord and manage your rental property.

Things to Keep in Mind Before Diving In:

  • Owning a rental property is work, but with proper systems in place it is manageable.
  • Sometimes there are short-term and long-terms gains, and sometimes there aren’t. Make sure to consider both when making decisions.
  • Don’t panic.
  • This is a business, so treat it as such.
  • We cannot predict the future and neither can you, so make sure to calculate all the risks you take.  
Download Military Landlord Toolkit

  • Military Landlord Guide
  • Military Landlord Workbooks

Step 1: Determine If You Have A Good Rental

Aren’t all homes considered good rental homes? Not necessarily. Just because you have a house doesn’t mean someone else will want to live it in (and pay to do so). Answering the following questions, make a quick list to see if your home would make a good rental:

  • Is your home located in a desirable location and neighborhood?
  • If the base were to close, is the economy in the area strong enough to support your rental?
  • Is your home close to the installation, good schools, shopping and entertainment?
  • Are there enough potential renters in the area to invest in your potential rental property?
  • Is everything on the property in proper, working order?
  • What will my tenants needs and interests be?
  • Is the home in good condition and well maintained?

Save this list for later. It’s going to help you write your advertisement for your property.

Pro tip:

Nothing is ever going to line up perfectly, but you want the pros of your house to outweigh the cons when deciding if it’s a good rental or not.

Step 2: Run the Numbers of Renting Out Your Home

While we’re all for you turning your property into a rental, we urge you to consider the numbers first. In some cases you may find it makes more sense to sell your home than to rent it out. In other situations, you may find renting out your home is the only viable option. The key here is research. No matter what you think you want to do, start running the numbers right away so you can make a calculated decision. Below are factors to consider before selling or renting out your home:

Selling

  1. Fair Market Value – Determining the fair market value of the home doesn’t mean it’s going to be equal to or more than what you originally paid for it.
  2. Closing Costs – When you sell a home you have to pay a lot of fees, especially if you’re in a down market and the buyer tries to put the closing costs on the seller.
  3. Realtor (and other) Fees – Using a realtor means you have to pay a certain percentage of the selling price in realtor fees. That fee also includes other fees, required repairs and miscellaneous transaction expenses. That can add up to be a lot of money.
  4. Economic Conditions – This will directly impact the value of your home and can make it unwise to sell.
  5. Selling in a Subdivision – How much you’ll be able to sell your home for will depend on if the builder is still building in the area, and if the subdivision has gained popularity.

Think you might want to sell? Connect with one of our AgentHeroes today!

Renting

  • Fair Market Rent – Determining the fair market rent of your home doesn’t mean it’s going to be equal to or more than the amount of your current mortgage payment.

 

  1. Monthly Expenses – These include items like your mortgage payment, insurance, property taxes, HOA fees, yard maintenance, AHS/2-10 Warranty and more. Are you able to rent the house for an amount that will cover these costs?
  2. Potential Income – This comes from when your fair market rent is more than your expenses and taxes. There are a lot of tax deductions you can take on your home and your rental property, so make sure to take that into consideration.
  3. No Positive Cash Flow – The reality is there might be a period of time where you don’t have positive cash flow on your property. The difference will have to come out of your pocket.
  4. Long Term Profit – Turning your property into a rental and hanging on to it for years allows you to build equity in it. That means later on you can make a major profit.

Pro tip:

There are times when it makes more sense to sell. But remember you’ll have to pay capital gains tax on any income you make off the sale. You can avoid that tax by rolling that income into another property purchase made within two years. You may be able to avoid that tax all together if you’ve live in your house for less than two years and are selling because of PCS orders. Double check the IRS code before making an decisions.

Pro tip:

Save money on a property manager by doing it yourself and hiring a Scout for periodic jobs! Find a Scout near you today.

Pro tip:

The best place to get current tax information about deductions and how to qualify for them is on the IRS website. Publication 527 will guide you through each deduction.

Step 3: Make Your House Ready to Rent

Congrats! You’ve decided to become a military landlord. Now what? Now comes the time to separate your feelings from your house and picture it as a business investment. Now comes the time to get to work. Before you PCS you need to take steps to get your home ready to be rented out. Here are the major items you want to take care of:

  • Make sure everything is safe and in good, working order
  • Depersonalize your home (like painting the walls to neutral colors)
  • Deep clean your home and declutter it
  • Take lots of clear images from multiple angles so tenants get a good idea of what your property looks like (include a sketch of the floor plan if you have one)
  • Make note of annoyances (like a frequently used train route) and perks (like a pool or a hot tub)
  • Be clear about expenses you should expect to pay as the homeowner (like the home warranty, termite bond, homeowner insurance, a property manager and the like)
  • Be clear about expenses your tenant should expect to pay (lawn care, active security system, pool maintenance, renters insurance and monthly pest control)

Step 4: Decide Who’s Going To Manage the Property

This is a high priority decision that shouldn’t be taken lightly. There is no right or wrong answer here, and this decision needs to be made based on your needs, time commitments and finances. There are advantages and disadvantages to either option.

Managing the property yourself means:

  • You get to know your clients personally
  • You have the opportunity to provide quality service
  • You maintain more control over the care of your property
  • You get the chance to save money
  • It can be stressful for you and your family

Hiring a property manager means:

  • The extra responsibilities taken off your plate
  • They market your home, show it to potential clients, screen tenants, inspect the property, handle the maintenance and repairs, and keep an account of your income and expenses.
  • You are more disconnected from decisions being made about your property
  • They cost you money and can lower your income off your rental

Step 5: Prepare for An Empty House 

It’s the ugly truth but we’d be remiss to not be honest with you. At some point your house will sit empty. Yes, that’s right. But don’t let that scare you off quite yet. It’s not ideal, but it’s going to be okay if you’re properly prepared. You must be prepared to cover monthly expenses in the event your house is not rented out. Keep the following in mind when preparing for an empty house:

  1. Have three to five months worth of mortgage payments in reserve
  2. Be ready to price your property competitively to attract your next tenant sooner
  3. Check the tax benefits; the period your house is vacant is considered lost revenue

Pro tip:

If you’re planning to turn your house into an investment property, start saving up your reserve today.

Step 6: Make Sure You Have Proper Insurance

Insurance stuff is boring but 100 percent necessary to understand when deciding to rent out your home. It’s very important that you have insurance and understand what your policy covers. The insurance you have on your primary residence is called homeowners insurance. But this insurance is different from all the other types of insurance you may need for owning a rental property. Below are some examples of the insurance you may want to consider.

Homeowners Insurance – Provides coverage for a private residence and includes coverage for losses occurring to your home, contents inside and around your home, loss of the use of your home and loss of possessions due to casualty or theft. It also includes a limited liability insurance for accidents that may occur at your residence.

Landlords Insurance – Sometimes referred to as a Fire Policy, this insurance covers the landlord/owner from financial loss should something happen to the property. Normal casualties such as fire, lightning, explosion, earthquake, storm, flood, theft and malicious damage are covered. All policies are different, so check to see what your coverage offers you. It is not common for landlord insurance to cover the tenant’s belongings, which is why we recommend putting a renters insurance requirement in your lease.

Umbrella Policy – Liability insurance that covers those losses that exceed what is covered by your other insurance policies. The more properties you own, the more likely you’ll want an umbrella policy.

Vacant Property Insurance – Insurance placed on a property instead of a homeowners policy or a landlord policy because vacant homes have a higher risk of vandalism, theft, arson, unrepaired water leaks, and other circumstances that could lead to major repairs if left unnoticed for a long time. Double check your current homeowners or landlord policy for a vacant property clause. Some policies void if the property is vacant for more than 60 days.

Home Warranties Vs. Insurance – Insurance is something you’re required to have while a home warranty is optional. Home warranties differ from insurance in that they cover specific systems and appliances in your home. That coverage includes appliance repairs, plumbing and electrical problems.

Pro tip:

If you use USAA’s landlord policy, the only part that will void after 90 days is glass breakage, vandalism and malicious mischief. The rest of your policy will stay current.

Step 7: Set Up Neighborhood Watch

When you move away from your home, it’s easy to start feeling disconnected from it. While this can help you start thinking of your property as a business, it can also present problems. As a homeowner you’re truly invested in the property – the tenants are not. That means you need to stay engaged with the area and what’s going on around your property. Here are several ways you can set up your personal “neighborhood watch”:

Follow the local newspaper’s Facebook page:

This is one of the best places to keep a pulse on what’s going on in the area. While most of the stories may not affect you, every once in awhile there might be an issue that could affect the value of your home or your neighborhood.

Join the neighborhood group/page on Facebook:

This allows you to stay connected on a mirco level and is a good way to keep tabs on what’s happening with in the neighborhood.

Tap into the Homeowners Association:

There’s a reason why you pay dues to these organizations. This associate is in place to help maintain the integrity and value of the neighborhood. Regardless of where you live, you still have a vote on decisions that impact your neighborhood.

Nextdoor.com

This is similar to a Facebook group, and allows members to post information on the neighborhood. It’s only accessible to the community and if your neighborhood doesn’t already have one, you could try suggesting it.

Step 8: Get Serious About Photography

The saying “A picture is worth a thousand words” is a cliche for a reason: because it’s true! Your potential tenants won’t even drive by your home, let alone think about renting it, if your photos don’t appeal to them. Use the following tips to ensure outstanding photos that hook your potential tenants from the start:

  • Start with the front: The front of the house should always be the first picture on your listing. Take a picture during a time of the year when the house looks its best.
  • Post only clean pictures with no clutter: Do not post pictures of your house with stuff everywhere. It’s very distracting and will turn off potential tenants.  
  • Look for the best opportunity for a photoshoot: You entire house doesn’t have to be clean to start photographing it. Take it one room at a time, photographing only clean and de-cluttered rooms.
  • Choose the right time of day: Lighting is the most important aspect of a photograph. The best photos of your house will tend to come from early morning or late evening. Cloud cover will eliminate harsh sunlight, while shooting mid-day casts a lot of shadows. Use natural light as much as possible for inside photos.
  • Include panoramic photos: Nearly everyone’s phones have a “panoramic” setting on them nowadays. Use it! This will give viewers a comprehensive view of what the room looks like.
  • Use an app to write on your photos: You can write the name of the room or create arrows and mini-descriptions to point out certain features. You can also write in the dimensions of the room or space, which is very valuable information for potential tenants. We recommend checking out Skitch.
  • Rent a lens: If you have a DSLR, consider taking photos of your home with it. If you don’t have a wide angle lens, which is ideal for real estate photography, then look into renting one. Check your local camera shop or visit http://lensrentals.com to find a lens for your camera.
  • Make a video: Make a video of yourself slowly walking through your house. Describe each room and pan around it slowly. Include any other relevant informtion the potential tenant might find useful.
  • Shoot straight: Double check to make sure all of your photos are straight. Crooked photos make the viewer feel uneasy and they might pass on your home.
  • Be honest: Don’t take misleading photos and try to trick your potential tenants into renting your place. You don’t have to highlight every little quirk, but you shouldn’t use smoke and mirrors to make the place look like something it’s not.

 

Step 9: Set Tenant Requirements

We’re sure you’ve heard horror stories from landlords who had the absolute worst tenants in the world. But we’re here to tell you it doesn’t have to be that way. With the proper systems in place you, too, can find great tenants for your property. Below are a few key points to setting your tenant requirements.

    • Income: You must establish a required income before you start looking for tenants. The 30 percent rule is a great standard: the rent plus utilities shouldn’t equal more than about 30 percent of their income. When renting to military folks, their BAH should cover rent and utilities. Be wary of any tenant who appears to be over-extending themselves.

  • Credit Report: A credit report shows 1) how much debt the potential tenant has and, 2) their track record for making payments. If a tenant isn’t good about making regular payments on their car loan, they’re not going to good at paying you. This is important!
  • Call the Previous/Current Landlord: Calling their housing references will give you an idea of what they were like as tenants elsewhere. It can help you confirm whether or not your potential tenant is a good one. Make sure to listen to your gut instinct though, as some landlords aren’t as forthright as they ought to be.

 

Step 10: Advertising Your Home

With your parameters in place, it’s time to get your house on the market. If you’re still living in your house, advertising it three to four months before you move is ideal. If you have current tenants, keep an open dialogue with them about an upcoming PCS so you can be prepared. When that time comes, you’ll want to get your house out there in the most effective way possible. Here are a few ideas to get you started:

    • MilitarybyOwner.com: This site is for military people looking to buy or sell their home. This is one of the most popular places to look for a place to live during a PCS. It does cost to put your home on their site, but they have different packages available.

  • AHRN.com: This site, too, is for military folks. The advantage this site has over it’s competitors is almost every base housing office refers potential renters and buyers to this site. It’s also free.
  • Postlets: This site is a one-stop shop where you create your ad for free. It’s then syndicated to over 20 different sites, including Craigslist, Zillow and Trulia. This helps you reach a wide audience, fast.
  • BooKoo.com: It started as an online yard sale but has morphed into so much more. They offer sub-sites for most military installations.
  • Facebook Groups: Never underestimate the power of word-of-mouth advertising! Posting about your house on the local spouses’ Facebook page will notify any newcomers there’s a home available. You can also check out the following groups: Military PCS Source, PCSing Spouses and Military Home Search.
  • Sign in the Yard: It’s old fashioned, but it still works. Just remember that it shouldn’t be the only form of advertising you do for your property.
  • Your Friends:  Reach out to your networks and let them know your house is available to rent. They can help spread the word and potentially help you find tenants.

 

Pro tip:

If you or your tenants are on the summer PCS cycle, try to get the property up in March. Orders typically go out around that time and people are already looking for new homes.

Step 11: Pre-Screening and Showing the Property

When that first email rolls in regarding the availability of your property, it’s time to assess the potential tenant. We’ve included a full pre-screening checklist in our download. But if you’re short on time, use the following steps to determine if the potential tenant is right for your home:

  1. Send them an email asking if they have time to chat about the property.
    1. If they don’t respond, no big deal. Don’t waste your time pursuing them.
  2. On the call, ask them why they’re moving to this location, where do they currently live, where do they currently work, do they have kids and/or pets and if they smoke.
  3. During the call be very clear about your pet and smoking policy. This should also be spelled out in your lease.
  4. Take notes during the call and be ready to move forward with showing them the property or decline to show them the property because you don’t think they would be the right fit.
  5. Once you make a decision, look up the potential client on Google and Facebook. This might seem creepy, but it’s a precautionary step that gives you an idea of what their lifestyle is like and what type of tenant you can expect.
  6. If you happen to rent out to someone in the military, having their new unit information is important: You don’t want to rent out to someone who will be working for/with you or your spouse.

After you’ve determined the tenants are a good fit, it’s time to setup a showing. Shortly before you show the home, make sure to call the potential tenants to confirm the appointment. If the person fails to show up for the showing, don’t bother chasing them down. If they’re unreliable about showing up to appointments then they’re probably unreliable about paying rent, too.

When showing your property, here are some key points to keep in mind:

  • Bring a friend or family member along with you for safety reasons
  • Invite the potential tenant to walk around the home on their own
  • If anything in your gut makes you uncomfortable about this person, simply step outside and wait for them to finish touring the home
  • Answer questions to the best of your ability and be honest
  • Continue to ask them questions and pull as much information from them as you can
  • Be careful with negotiations and don’t consider tenants who can’t afford the rent
  • Stick to your guns; if the prospective tenant can’t work with your requirements, they’re not the right tenant

Pro tip:

If you or your tenants are on the summer PCS cycle, try to get the property up in March. Orders typically go out around that time and people are already looking for new homes.

Step 12: Send an Application

After you’ve shown the client the property, and both parties are still interested in working together, then you can send the potential tenant and application. We have a great example of an application in our download, that you’re more than welcome to use. The application should include the following items:

  • Who they are – Name, date of birth, driver’s license and citizenship status
  • How they handle their money – Their credit report
  • Where they work – Including contact information
  • Their past two landlords – Including contact information

 

Pro tip:

Make sure to dig into their credit report and look for any red flag items that would indicate they’re unable to pay in a timely manner.

Pro tip:

USAA offers a service called Tenant Screening. There is a fee for this service, but you may want to give it a try because it’s a one-stop shop for all your screening needs. We do recommend you do some research on it, however, because it does have mixed reviews. https://www.usaa.com/inet/pages/tenant_screening_main

Step 13: Choose a Tenant

We cannot stress how important it is to choose a good tenant. You will avoid 95 percent of tenant issues landlords face if you take this step seriously. Following the systems you put in place will allow you to find a great tenant and avoid disaster.

Don’t skip steps. Don’t make emotional decisions. Don’t make assumptions.
If you have to choose between two different but equally qualified applicants, we recommend you choose the applicant who turned in their information first. In our experience, that’s been the most fair way to handle that situation.

Step 14: Get a Security Deposit

A security deposit comes from the tenant and is meant to secure the rental agreement. Security deposits are returned at the end of the lease if the terms of the lease have been fulfilled. This deposit confirms that the tenant is in fact going to rent your place. It also provides a safety net against damages to the property. The amount of the security deposit is typically equal to one month’s rent.

Every state has different rules about what you can and cannot do with a security deposit, so be sure to read up on the specifics.

Pro tip:

If you had more than one person apply for your property, keep those names handy. If something falls through with your first tenant, you can call down the list of others who were interested.

Step 15: Get the Paperwork in Order

A rental agreement isn’t official (or legal) until you’ve got all your paperwork lined up. You might not need all of the items listed below, but it’s good to have them in your back pocket, just in case. We have  several of these items in our download that you can print out and use. That being said, these are just samples. It’s up to you to ensure you’re using a proper legal documents. A JAG is a great resource if you can’t find the answer on your own.

Lease/Rental Agreement – This is the binding agreement that states your tenant is going to live in your rental for a specified amount of time. It’s crucial to use a state-specific lease here.
    • Your lease should include:
      • The length of the lease (time)
      • The rental amount and when it’s due each month
      • The amount of the security deposit and what it can and cannot be used for
      • Your pet policy (how many, breed types, process to add more pets, etc).
      • Your smoking policy
      • Who is responsible for utilities (typically the tenant) and a utility checklist
      • Who is responsible for maintenance of the home
      • Assign Lease/ Sub-Lease policy
      • Early termination clause
      • Military clause
      • Long-term vacancy notification requirements
      • Sight-Unseen Agreement (in case your tenants are renting sight unseen)
      • Lead Paint Disclosure (which applies to homes built before 1978)
      • State specific disclosures
      • Landlord utility agreements
      • Move in/move out checklist (to keep track of the condition of the property)
      • House inspection requirements
      • Notice to enter the property requirements

 

Pro tip:

Companies like Rocket Lawyer, LawDepot.com and EZLandlord.com can help you with all of these documents. They get specific with states as well, so check them out!

Step 16: Build a Good Relationship with Your Tenant

Building a good relationship with your tenant will help you avoid 95 percent of the issues landlords regularly run into. Here are a couple tips to help you build a great relationship with your tenant:

    1. Treat people as you want to be treated. Treat your business like a business, but your tenants like people. That kind of customer service goes a long way.
    2. Respect your tenant’s rights. You’re required to provide a safe and habitable living environment that includes running water, electricity, a working phone line, heating and protection from the elements. And you cannot enter the house without their permission unless there is an emergency or you’ve given written notice for an inspection.
    3. Maintain reasonable and realistic expectations when it comes to renting out your property. Expressing your expectations clearly and establishing an open line of communication will increase your chances of having a mutually beneficial relationship with your tenants. Avoid making promises you can’t keep and don’t be afraid to stick to your guns and enforce policies set out in the lease.
    4. Set up direct deposit. This is easy to do and makes collecting rent much easier. We recommend you open a separate account to receive this money, so it doesn’t get mixed in with your personal finances (a key aspect to running a business!).
    5. Raise the rent only when it’s appropriate. It’s important to keep your rent competitive with the surrounding rental market. The two most common times to raise the rent are at the lease renewal, or after a tenant leaves and the property is back on the market. But you should only raise the rent based on current market values.
    6. Track and manage your expenses. You will need this information come tax season, so save any receipts for work or repairs made to the house throughout the year. We recommend keeping a digital copy and a physical copy of everything.

 

Pro tip:

Companies like Rocket Lawyer, LawDepot.com and EZLandlord.com can help you with all of these documents. They get specific with states as well, so check them out!

Step 17: Prepare for Emergencies

If you have a property manager, then a lot of this information won’t apply to you. But if you’ve decided to manage your property yourself, then it’s important you keep reading. At some point something will go wrong with your house. It may be small, like a light bulb going out, or it may be a bigger issue, like a tree falling on your house. No matter what the situation is, it’s important to be prepared. Here are a few tips for preparing for an emergency:

  • Make sure to outline in your lease agreement what type of issues the tenant is responsible for fixing.
  • Include a “Low Cost Repair” clause in the lease that gives homeowners the permission to fix issues under $100 and guarantees them they’ll be reimbursed for the cost.
  • Establish good communication and let your tenant know that they need to notify you of any major issues.
  • Consider getting a home warranty to help limit repair costs and make unexpected costs more manageable. This especially comes in handy when big issues, like an air conditioner dying, come up.
  • Keep a running list of contractors and repair people on hand. (See the download for a detailed list of how to find reliable contractors and repair people).

Pro tip:

While some items will fall under the “fix it yourself” category, a military spouse at home with three young kids and a deployed husband might not be able to tackle that issue. Use good judgement and take care of your tenants, even if it costs you a little extra money.

Step 18: Getting Rid of a Tenant

Unfortunately there may come a time when you need to remove a tenant from your property before the lease expires. While there is discomfort in evicting a tenant, it needs to be done. Here are some tips for removing a tenant from your property

  • Stay objective and professional
  • Don’t get emotional or make it personal
  • Follow the law
  • Document your process
  • Follow the Golden Rule and treat the tenants with respect
  • Write them a Notice to Comply with the lease provisions or to vacate the premises by a certain date and send it by certified mail
  • Offer a deal to the tenant in order to have them removed sooner
  • Consult your installation JAG for more information on the eviction process if the tenant refuses to make a deal with you
  • Consider reaching out the tenant’s chain of command (if s/he is a service member) to notify them about the issues you’re facing with the service member
  • Be prepared to go to court if necessary

Pro tip:

While some items will fall under the “fix it yourself” category, a military spouse at home with three young kids and a deployed husband might not be able to tackle that issue. Use good judgement and take care of your tenants, even if it costs you a little extra money.

Step 21: Preparing for the What-Ifs

Life is full of what-ifs and the same goes for being a military landlord. Below are just a few what-ifs to keep in mind as you make the decision to become a landlord (or not):

  • What if people back out?

If a tenant backs out before the lease is signed, you have very little legal recourse and you’ll have to put the home back on the market and look for a new tenant. If the tenant backs out after the lease is signed, then take a look at your lease. The lease should specify the obligations of the tenant in this situation, and usually the tenant will lose their deposit.

  • What if our current tenants don’t have orders, but say they are moving soon?

The first question you should ask is, “Do they have RFO (request for orders)?” If they don’t have orders or RFO this is a wait and see situation. We suggest contacting your current tenants and talking to them directly about their situation. In the meantime, get your advertising plan and photos ready. Thirty days is plenty of time to get a new tenant and your current tenants will most likely have to give you at least that much notice (per your lease agreement).

  • What if my current tenant wants to get a roommate?

If your tenant calls asking about a friend/roommate moving into the house, that new person will need to complete the application and screening process, just as your current tenants did. You also need to determine what will happen if you current tenant decides to move and the new one is not moving. Think this situation through in advance, decide on a course of action and document it.

  • What if my tenant wants to get a puppy?

If you are not comfortable with a puppy in your home, do not agree to it. If you have a no pets policy, just stick to your policy and say “no.” If you have good tenants who are willing to dedicate the time to taking care of the puppy, pay the pet deposit and security deposit cover then it’s something you might want to consider.

  • What if my tenant wants to paint?

You can allow your tenant to paint after approving their color choices. Or not. The choice is up to you. But keep in mind that not all painters are good at it. You may want to consider asking them to have it professionally done if they want to paint. Otherwise it can get messy and hard for you to deal with as a long-distance landlord.

  • What if my tenant wants to make an improvement to the house or yard?

Whatever request they come to you with, make sure you understand completely what they are asking and request photos if you are still unclear about the changes they want to make. If they’re willing to pay for the changes themselves, that free work for your home! But if they want to make changes and ask you to pay for it, and you don’t have the financial resources, simply say “no.”

  • What if our tenants move? Do we change the locks?

Changing the locks sounds a lot harder than it is. Nowadays it’s pretty easy to switch out the locks after a tenant leaves the house. Check your state laws regarding changing locks between tenants. Some states require it, while others do not.

Pro tip:

While some items will fall under the “fix it yourself” category, a military spouse at home with three young kids and a deployed husband might not be able to tackle that issue. Use good judgement and take care of your tenants, even if it costs you a little extra money.

Step 20: Turning Over Your Property

As you prepare to turnover your rental property, assess your rent amount by using the fair market rent form available in the download. You might be surprised by how much the rental market can fluctuate near military installations. Below are several ways you can turn over your property:

  • Hire a Property Manager Full Time

If you already have a property manager then go ahead and skip this section. But if you don’t you might consider hiring one. Part of their duties include turning over the property to new tenants after the other tenants have vacated. This can be a great option for military families who chose not to manage their property themselves over long distances.

  • Hire a Property Manager Just to Turn Over Your Rental

While you may not want a property manager full time, some do offer limited services like turning over a property from the old tenant to the new tenant. This is another great option for military families who are managing their properties long distance.

  • Turn the Property Over on Your Own

After your current tenant cleans the home, they can leave a key in the lock box on the front door. You can give your pre-screened potential clients the access code after they send you a valid driver’s license. They will then be able to tour the home themselves and lock up when they leave. While this may seem risky, screening potential clients beforehand mitigates most of that risk. If the potential clients are still interested and they prove to be good clients from your checklist (as described earlier) you can simply “hand over the keys” via the lock box after all the paperwork is taken care of.

  • Ask A Friend To Help You Turn Over Your Property

If you have a local friend who is willing to help, you can provide them with a set of keys and they can assist turning tenant transitions.

  • Ask Your Current Tenant

Depending on your relationship with your tenant, you could ask them to show the property and pass off the keys to the next tenant, while you screen and approve the remotely. You could sweeten the deal and offer them a discount on their last month of rent.

  • Hire A Scout To Turn Over Your Property

Once the current tenant leaves the house, you can give a Scout the lock box code at your home or send them a set of keys. They can be present to help show the home to potential tenants as well as hand over the keys to new tenants. This is a great way to have a trusted person help you out with a very important task.

Pro tip:

While some items will fall under the “fix it yourself” category, a military spouse at home with three young kids and a deployed husband might not be able to tackle that issue. Use good judgement and take care of your tenants, even if it costs you a little extra money.

Step 19: Renewing A Lease

Receiving notice from your tenant can be a dreaded moment. But it happens. Once it does, open communication with your tenant goes a long way to providing you information on what the future holds for them. The following are some situations you may find when your tenant turns in notice.

  • Non-renewal

If you had tenants that didn’t meet your expectations or have been troublesome, then you can forgo renewing a lease. Give them an informal notice of non-renewal 60 days prior and formal notice 30 days prior (check your state’s requirements on renewals).

  • Renewal

If you had great tenants and you want them to stay, contact them about 60 days before the expiration and ask if they’d like to renew.

  • One-Year Lease Renewal

If your tenants want to stay at your property for another year take a moment to consider if you want to change any of the terms of the lease agreement or raise rent. Make sure to discuss these agreements with your tenant. If they agree, make the appropriate changes and either amend the lease or enter into a new lease (check your state’s requirements on renewals)/  

  • Month to Month

Depending on your tenant’s circumstances, renting month-to-month might be the best option for them. But whether or not you allow it is completely up to you. It is common to raise the rent once a tenant goes month-to-month. This is a tactic to get the tenant to sign a one-year lease. But keep in mind that if they’re military they could sign a one-year lease and then use the Military Clause to break it.

Pro tip:

If you have to put your home on the market during the fall or winter months instead of high PCS season, don’t panic. Just set your expectations differently. Summer does have more potential tenants, but more competition. The winter months bring less tenants but less rentals on the market.

WOW! Congrats! You made it! We hope this overview gave you insight into being an informed military landlord. Owning and managing property comes with new and unique situations all the time. Be sure to download the entire guide for all the details plus worksheets!

Download Military Landlord Toolkit

  • Military Landlord Guide
  • Military Landlord Workbooks