Having your property as a rental is a great way to make extra money while you’re out traveling. If you’re not sure if it’s better to have your property as a short term rental or long term rental, use our comparison guide here. You can also read our article How to Prepare Your Property as a Short Term Rental, too.
There are several things to do to prepare your property when you’re planning to have a long-term renter move in for a year or several years.
We’ll share everything you should plan for and consider in your preparations. We’ll also share our experience having long- term renters in our home for four years while we traveled.
1.Where to Put Your Stuff?
For most long-term renters, they have their own furniture and want to use their furniture while they live in your home. So, you need to figure out where to put your furniture and your stuff. Do you want to sell it all? Do you want to put it away in storage? Do you want a friend to borrow it?
When we were preparing our home for renters, we hoped we would be traveling for two years, but we had no idea how long we’d make it out there. We ended up traveling full-time for four years and renting our home to long-term renters during that time. A friend who’d traveled to New Zealand for a year and then returned home said they regretted selling everything since they were gone for a short period of time. They felt they lost money since things are more expensive to buy and you only get a small portion back when you sell it.
We did a mixture of things to remove our furniture and stuff for our renters. We didn’t want to have to pay per month to store items we weren’t using. We donated things, we sold some items, we let friends borrow beds and sofas for their guest rooms and living rooms while we were gone, and we stored items away in our locked attic.
In the midst of our travels, our friends borrowing our furniture for their guest bedroom moved. So, we moved that furniture into our shed in the backyard of our house and locked it away. I preferred to put the meaningful furniture away in air controlled storage, but to save money each month I was okay taking the risk with our furniture being exposed to the elements all year because we live in dry Colorado. And, all of our furniture was good to go when we returned. However, if we lived in muggy Georgia, we would have either paid for room controlled storage or decided to sell the furniture.
Need help downsizing? Here’s tips from Nomad Collab member Tina Klinefelter on how her and her husband Craig downsized from their 4,000 square foot home to their 400 square foot RV.
2. How to Price Your Rental?
How do you figure out how much to rent your home for each month? Go to rentometer.com and enter your address and the amount of beds in your home. The website comes up with a good rental price for your property based on other rentals around your home.
We were able to rent our home for $1,500 a month. This was $500 above our mortgage payment. After paying our mortgage and our property manager each month, we netted around $300- $400. We saved a portion of that income for future maintenance issues that could come up.
3. Find a Property Manager
While you travel the country and the world, make sure you have a reliable and trustworthy property manager that can be the point person for your tenant if something comes up while you’re away. Many property managers charge 10% of your monthly rent. Check around with friends and family to get referrals with property management companies to see who may be best for you to hire.
We worked with a friend as our property manager and paid him $30 monthly to be available for our tenants. If something needed to be done, we paid him $30 hourly for his time and we also paid for his mileage to and from our home while running errands.
The first several years were great and he did a great job with our tenants. However, while we were gone, our friend’s family grew and so did his responsibilities at home. So with our last tenant, things started to slip and our friend wasn’t visiting our home as much.
Our tenant had started smoking in our home. When we returned, the smoke smell was so bad, we had to get all new floors in our home and KILS every wall, ceiling, and even the inside of cabinets. This cost several thousand dollars and the security deposit didn’t put a dent in the total damage cost. We recommend working with a property management company that’s dedicated to your home.
4. Find a Renter
How do you find a renter? Ask friends, put a note out on Facebook, or put a listing on Craigslist.
Each year, we found a new renter using a Craigslist listing. We hired another friend (we trusted her judgement) to communicate with interested folks, meet them at our house, and show them around the property. If you have a property management company, they’ll probably do this work for you.
Since you’re moving out, where will your mail be sent? Can family receive it for you? Can you have a service receive it and send it to you? There are several well known services you can use like Escapees mail service, Earth Class Mail, and Dakota Post.
A family member of ours graciously received our mail for us and would email us pictures of any important documents we needed to take action on.
6. Tell Neighbors
Make sure you let your neighbors know of your plans so they can prepare themselves to meet new neighbors. Also, share your contact information and your property manager’s contact information with your neighbors so if anything comes up, they know how to contact you or your management team.
We told our neighbors we were leaving and renting our home, but we didn’t share our contact information or our friend’s information who was our property manager. When we returned home after four years of traveling, we started reconnecting with our neighbors and we started hearing a lot of stories about each tenant that was in our home. Many neighbors said, “Well, I would have contacted you to let you know, but I didn’t have your contact information.”
Your neighbors are your eyes and ears while you’re away and they will see more of what’s happening with your renters and your home than your property manager will. Give your neighbors the tools to stay in touch with you so you can be in the know and can alert your property manager if a neighbor sees anything. This may save you a lot of money later, like having to redo everything because your renters started smoking inside.
7. Transition Utilities & Trash
Make sure to transition the utilities and trash between yourself and your tenant or in between tenants. It’s a simple call to both your utility company and your trash service letting them know the date the service will be changing between people.
8. Maintenance & Fixes
Complete any maintenance work and fix things before renters come in so your home is safe for others to live in.
We did a lot of work to prepare our home. We painted the exterior to make it look nicer and be able to rent it for more per month. We got a new hot water heater, we got a new roof, new skylights, and a couple new windows that were leaking. I joke that our renters lived in a better house than we did!
Call your insurance provider and let them know of the changes happening with your home and that you’ll have renters staying in your property. If you have items staying on your property, let them know and make sure you have coverage for those items. Also, let your agent know your new lifestyle plans and if you should get a new type of coverage for what you’ll be doing.
Since we were traveling the world and staying in so many different places, we got coverage for if we did damage to anyone’s property while we were gone, too. And, we got renters insurance for all of our furniture that were at friends and family’s houses. A friend of ours put their belongings in her parent’s basement and it got flooded from the sprinkler system busting in the winter. The parents were away when it happened and everything was covered in mold. Having renters insurance for your belongings is important.
10. Sign a Lease
Make sure your renter signs a lease for each year they’ll be living in your home. You can find templated leases for your state online or you can buy templates at FedEx.
Over four years with four different renters, we learned a few things. We include the lease we use (our home’s in Colorado), a pet addendum we use, and a lead paint disclosure we have renters read since our house was built in the 1930’s here.
11. Security & Damage Deposit
How do you handle the security deposit? Upon signing the lease and before moving in, we recommend you get the first month’s rent and the last month’s rent from your renters. We also recommend getting two months worth of rent for the security deposit.
With the first three renters, our home was in great condition when they left. We gave their security deposit back to them. However, with our last renter smoking in our home, it cost a lot for us replace everything and get the smoke smell out. We only had $1,500 of a security deposit and it cost over $12,000 to redo the floors and paint everything in our home. That’s why we recommend getting two month’s worth of rent for the damage deposit. It still didn’t cover the damage, but it would have been better.
You Got This!
Yes, there’s a lot to do to prepare your home as a long-term rental. Use this document as a checklist and take it step-by-step focusing on one item at a time. You’ll get there and be on your way to more freedom soon! We’re cheering you on!
Short Term Rental?
If you’re curious about what to consider when setting up your home as a short-term rental, read our guide here.
If you have any more advice from your experience having your property as a long-term rental, please share in the comments below!