Interested in Becoming a Military Landlord?

Thinking About Renting Out Your Home? Here’s What to Consider

As you prepare for your next move, have you thought about renting out your current home instead of selling it? Becoming a military landlord may require effort and planning, but with the help of a professional property manager, it’s entirely achievable. Real estate investments can also be an effective way to build wealth over time. Here are some essential factors to keep in mind as you decide whether renting is right for you.

Is Your Home a Good Rental Candidate? Assess whether your home’s location will attract renters. Is it in a desirable neighborhood, close to schools, shopping, and entertainment? Military areas typically have a strong rental market, but it’s essential to confirm there’s enough demand in your specific area. Also, consider if the home is in good condition and well-maintained—renters are often drawn to properties that are move-in ready.

Evaluate the Financials When deciding between renting or selling, treat it as a business decision. Is your home’s current market value greater than your remaining mortgage? If selling, would you be able to cover closing costs, transaction expenses, or repairs? If renting, ensure the rental income can cover expenses like your mortgage, insurance, property taxes, HOA fees, and property management costs. Consulting a tax advisor can help clarify how rental income and expenses may affect your tax liability.

Pro Tips for Military Landlords

• Capital Gains: Income from selling your home may incur capital gains tax. However, reinvesting the income in another property within two years can defer or avoid the tax.
• Preparing Your Home: Before renting, make sure everything is in working order and consider neutral updates, such as fresh paint. A property manager can assist with tenant screening, maintenance, and setting clear guidelines on tenant responsibilities like lawn care and security.

Support from a Property Manager Hiring a property manager can make the process easier by handling tenant selection, property inspections, maintenance, and financial tracking. If your property is located in the Hampton Roads, Southeastern Virginia, or Northeastern North Carolina areas, reach out to us for a referral to a property manager who can discuss options with you.

Plan for Vacancies While the rental market is generally strong, it’s wise to have three to five months’ worth of mortgage payments in a reserve fund in case of vacancy. Start saving now to ensure you’re financially prepared for any gaps in occupancy.

Get Proper Insurance Coverage Owning a rental property requires different insurance than a primary residence. Landlord insurance protects you from property damage, while vacant property insurance can provide added coverage if your home will be unoccupied for extended periods. An umbrella policy can offer additional liability protection beyond your standard coverage.

Stay Connected to Your Investment Treat your rental property as an investment and stay informed about the neighborhood. Following community pages or the HOA on social media, or using platforms like Nextdoor, can help you stay updated. If you notice any concerns, notify your property manager.

Share Your Experience Are you a military member with advice or experiences to share about renting out a home? Let us know in the comments to help others considering this path. We’d love to hear from you!