For members of the armed forces, receiving a Permanent Change of Station (PCS) comes with many decisions that must be made. What will you do with your home while you're away? Though selling may seem like the only choice, military members have other options available. One of the most attractive choices is turning your home into a long-term rental. Not only does this open up options for those who are considering returning to the area, it also allows extra time to make decisions for those who are unsure of their future plans. Leaving a home sitting vacant on the sales market can potentially expose it to maintenance issues going unaddressed. And, if the sales market in the area isn't allowing for buyers to present good offers on the home, it may end up sitting for months or years on end.
However, turning the home into a long-term rental will not only result in some extra cash flow, it will also guarantee that someone is caring for the home in your absence. While managing tenants long distance can, of course, also be a daunting task, using a professional property management company to "be your eyes and ears" in your absence is a great way to ensure your home is being properly cared for. We've come up with 4 reasons why putting your home on the rental market is a great choice for service members who have to quickly pack up and leave the area.
1. Financial Advantages of Owning Rental Properties
There are many financial perks to becoming an investment property owner or landlord as real estate investments are a great way to build additional wealth. If you're not interested in selling your home, having rental income will oftentimes cover most, if not all, of a monthly mortgage payment. This, coupled with the housing allowance that service members receive, gives service members the freedom to hold on to their homes while they're stationed elsewhere and continue to bring in some additional income. Owning a home in an area where there are military bases also essentially guarantees you'll have a pool of renters who may have just transferred to the area and are seeking rental homes.
Not only can investment properties garner extra income, they oftentimes come with great tax advantages. Expenses associated with occupied rental properties can be written off. This includes such things as maintenance costs, upgrades and repairs, and some professional services. Rental properties can also claim deductions for depreciation. All of these are wonderful advantages for investment property owners; however, please be sure to always discuss tax options with your accountant or another tax professional.
2. Freedom to Consider Your Long-Term Goals
If you've received a PCS and don't have much time to make plans to move, putting your home on the rental market will allow you to keep your home while giving you more time to consider your ultimate goals for the property. Are you considering returning to the area after your deployment is over? If the answer to that question is "yes", or even "I'm not sure", putting your property on the rental market will allow you some time to fully explore all of your options without being rushed into a decision.
3. The Sales Market is Slow
Say you don't have plans to return to the area but selling your home at the current time would result in you losing some money or accepting a less-than-ideal offer. If the sales market in your area isn't able to produce a buyer who can pay a reasonable amount for your home, putting it on the rental market allows you to hit pause on selling until the market improves. Becoming a landlord for even a few years will give you the opportunity to wait until the market rebounds and you are able to command the price you deserve for your home. And, in the meantime, you'll be receiving monthly rental payments on your home which will reduce financial strain vs. having it sit vacant on the sales market for months or years. Occupancy rates in the Greater Wilmington area remained at about 97% in the past year, a good indicator that there will be qualified renters looking for places to live.
4. Protection for your Home
If your PCS is taking you several hours away or even across the country, leaving your home vacant on the sales market can potentially open the home up to a host of maintenance issues. Turning the home into a rental, however, will guarantee that someone is not only caring for your home but also looking out for any potential maintenance issues that need to be handled. If a pipe bursts in a vacant home, for example, it may go unnoticed for weeks or even months which will, in turn, cause a host of damages to the home. Similarly, in our hurricane-prone area, having no one to check your home and be sure it is storm-ready could not only result in needing expensive repairs, but also create unneeded stress for you, the owner.
Working with a Professional Management Company
If you've considered all your options and decided to rent your home out, the next thing you must decide is how to manage the rental. Who will show the property, screen tenants, and handle maintenance issues in your absence? This is where professional property management companies come in. Working with a professional property management company will allow your time as a landlord to essentially be hands-off as they'll handle every aspect of your rental from advertising to lease signing to turnover work.
Using an experienced property manager will provide you with a liaison between you and tenants, meaning that they'll handle any maintenance issues and questions or concerns from tenants as well as all financial, accounting and legal aspects of your property. The last thing you need to worry about is finding a reputable plumber to handle a leak if you're 2,000 miles away. Professional property management companies are not only seasoned in handling rental maintenance issues but also have access to trusted, licensed vendors who will be able to quickly address any issues at your property.
Deciding to become an investment property owner is, of course, a big decision that only you can make. But, when considering the financial benefits for you and your property, it is certainly an attractive option. If you're going to be leaving the area soon and are unsure what to do with your home, please reach out to Sweyer Property Management's team of experts. They can provide you with a no-obligation rental analysis and help you determine the appropriate rental rate, suggest maintenance or property upgrades, and answer any questions you have about the process.
Want to learn more or find out what your home may rent for? Reach out to our experts today via our website or by calling 910.256.3031.