We are moving in less than a month just a few miles away.
The real estate is so depressed here, it never really recovered from the 2008/09 crash. We bought in 2007 at the height of the market.
We’re going to rent instead. We live between two military bases so we do want to advertise on the military rental website.
What tips and hints can you offer? How much does a rental property manager usually charge and are they worth it?
If you’re only a few miles away, you probably don’t need a rental property manager. We live on the other side of the planet, and we get by without one.
Property managers REALLY vary on their quality and how much they charge. We used to have one that charged 10%, plus would charge us for bogus things that they claimed they purchased for the property but were never put there. They were always negative cash flow and we had a lot of problems with them. We switched to a property manager who came highly recommended who only charges 7% of gross rental and also does a great job of keeping the place maintained and responding to tenant issues. He always has positive cash flow and is very responsive any time we call him. I have heard of other property managers charging much more.
I know of several folks who manage their own properties, so it really is a personal decision. We like having someone else handle it all, as he does it well and is one less thing on our plate. If you live fairly near the property it isn’t very onerous to manage it yourself, as long as you can be business-like about setting the rent and following through on repairs and checking credit and references, as well as possible eviction and other legal issues.
Do credit checks and call their references.
Have a written lease agreement.
If you have a yard to maintain, decide if you can trust the tenants to maintain it, or if it would be better to have your own gardener service handle it.
Keep copies of all your communications with your tenants.
Take detailed detailed detailed detailed pictures of your property before it is leased - it’s a record of the condition of the property at the time of the lease.
Keep receipts of any and all expenditures made for the property.
Have a good plumber on hand; this seems to be the most common type of maintenance issue, I have found.
Change your property insurance to rental property insurance.
Do annual inspections of the condition of the property (in addition to as you feel necessary) but observe the laws of your state re: giving notice before visits.
This is just off the top of my head, but there are lots of good internet articles on renting out your property, with detailed checklists. It’s really not that hard to manage yourself, especially if you live close by.
My real estate agent in Montgomery County, MD referred me to the rental division of her agency. At that time, their normal charge was one month’s rent per year.
Your state probably has laws regarding rental property, and if you get the official lease or rental form for your state, some of that information will be covered. Be sure to specify end time on the lease. 12 noon is common in my area on the last day of a month. Move in on the first, 12 noon, which gives you a precious 24 hours to turn the property over.
Make sure you have a move in/move out form for damages. Walk through with the parties and make sure they understand how the windows work, the thermostat, any other mechanical parts. Don’t assume a thing. I always remember the guy too hung over for the walk through on move in, who later broke a window because he did not understand how they worked.
If wooden floors, they need to know how to care for them. Add a lock out charge to the lease. Think about car washing in the drive if you pay for the water. I exclude it, after incurring some massive water bills. Include when lease is to be re signed for the following year if tenants choose to stay.
I managed my own rental property for about 5-6 years before turning it over to a property manager. It’s not particularly difficult to manage on your own, I just got tired of it. There’s plenty of resources available online; basically you need to find a rental agreement you like and sign up for a credit checking service. I recall hearing the requirements for checking someone’s credit tightened up, but I don’t know what the current requirements are.
Property managers do vary, as noted above. I didn’t like the first one I tried. The second one is a company that seems to go through people pretty regularly, but the service has generally been decent.
Make sure you understand the special rules that might apply to rentals to military families in the event of deployment or assignment to a new base.