PCS orders and your house: how to rent it out from your next duty station

PCS orders come with a report date and a long list of things to handle before it. If you own your home, one of the biggest items on that list is what to do with the house. You are not alone in facing it: according to Armed Forces Bank, about 45% of the service members it surveyed owned a home before a PCS move.

Plenty of them keep the house and rent it out, because they expect to come back to the area, because selling right now would not make sense, or because they want to hold onto it for the long run. This guide is for that decision: how to run a rental from your next duty station, or from the other side of the world.

Before you leave: the short list

• Call your mortgage servicer. Let them know the home will be a rental, and ask whether your loan has an occupancy requirement you need to account for.
• Switch your insurance. A homeowners policy is generally written for a home you live in. A rented house usually needs a landlord (dwelling) policy. Ask your agent before the tenant moves in.
• Check HOA and city rules. Some HOAs restrict rentals, and some cities require a rental license or registration.
• Decide who manages it. You, or a property manager. More on that next.
• Name a local contact and sort out a power of attorney. Someone who can act when you cannot.
• Talk to a tax professional. Renting the home changes your tax picture, including on a future sale.

Manage it yourself or hire a property manager?

Both work. The right answer depends on how reachable you will be, how many homes you have, and how much you want to be involved.

If you interview managers, ask how they approve repairs, how and when they pay you, what reporting you get each month, and how they handle military tenants who leave early on orders. Some owners split the difference: they hire a manager to find and place the tenant, then run the month-to-month themselves.

Power of attorney and a trusted local contact

Deployments, field exercises, and ships at sea all make you hard to reach. Two things cover that gap.

A power of attorney. A specific power of attorney for the property lets someone you trust sign documents for you, such as a lease renewal or paperwork with the county. Your installation's legal assistance office can typically help service members prepare one. Make it specific to what the person needs to do, not broader.

A local contact. This is the friend, relative, or former neighbor who can let in a plumber, check the house after a storm, or meet a locksmith. Write down what they can approve and up to what dollar amount, so nobody has to guess while the water heater is leaking. Thank them properly. It is a real favor.

Collect rent remotely, every month

If you will be moving around, rent collection cannot depend on your mailing address. Paper checks sent to a house you no longer live in, or to a relative, are how payments go missing. Collect online instead and make it the standard way to pay in the lease. A few states require landlords to also accept a non-electronic method, so check the online rent payment rules for your state.

A good setup does the routine for you. A recurring invoice goes out each month on the due date. Reminders go out before and after the due date without you lifting a finger. The tenant pays by bank transfer or card, the money goes to your own bank account, and you get a receipt and a record you can check from your phone, whatever time zone you are in. If the tenant ever hands a check to your local contact, record it against the invoice so the ledger stays complete.

Maintenance from a distance

Build your local bench before you leave, while you can still meet people in person:

• A handyman for small jobs and a second one as backup.
• A plumber, an electrician, and a heating and cooling company.
• A locksmith, and someone for lawn care and snow if the tenant is not responsible.
• A cleaner for turnovers.

Ask your local contact, neighbors, or a real estate agent for names. Set an amount that a contractor can spend on an urgent repair without waiting for you, and say so in writing. Have tenants submit maintenance requests online with photos, so you can see the problem before you approve the fix. Schedule the predictable work on a calendar: furnace and AC service, gutters, and filter changes if the tenant does not handle them.

Renting to military tenants

If your home is near an installation, a lot of your applicants may be service members, and you understand their lives better than most landlords do. One rule to plan for: the Servicemembers Civil Relief Act (SCRA) lets a service member who is a tenant end a residential lease early, with written notice, when they receive PCS orders or deploy for 90 days or more. It is federal law, so build it into your planning rather than trying to work around it. Keep the house rent-ready between tenants, and keep some cash set aside for a turnover that comes earlier than the lease end date.

The details of the SCRA, including the timing of the termination, are specific. This is general information, not legal advice; check with an attorney or your legal assistance office. As with every applicant, screen consistently against the same written criteria and follow fair housing law.

Taxes and insurance

Federal. For most individual owners, rental income and expenses are reported on Schedule E. Keep a record of rent received and every expense from the month the house becomes a rental. Our Schedule E guide walks through it.

State. This is where it gets complicated. Service members have special rules about their state of legal residence, and the state where the house sits may tax rental income from it even if you no longer live there. The answer depends on your home of record, your current station, and the property's state, so ask a tax professional who works with military clients. Your installation may also offer free tax help.

Selling later. The home-sale exclusion generally requires that you owned and lived in the home as your main home for two of the five years before a sale. The IRS has provisions that can suspend that five-year period for service members on qualified official extended duty (see IRS Publication 523). Ask a tax professional how it applies to you. This is general information, not tax advice.

Insurance. Beyond switching to a landlord policy, many owners require renters insurance in the lease. Think about where your own belongings are going, too, since they will not be covered under a policy for a house you no longer live in.

How RentMerchant fits

RentMerchant is built for small landlords, and it works the same whether you are down the street or several time zones away. Add the property and your tenant (no unit setup required), set the monthly rent and due date, and the invoice goes out every month on its own with automatic reminders before and after it is due. Tenants pay by bank transfer or card in their own portal, card payers can turn on autopay, and payouts go to your bank through Stripe.

Tenants send maintenance requests with photos, you keep your contractors in one place, and expenses roll up into a Schedule E export at tax time. There is an iPhone app for landlords and tenants, so you can check on a payment or a repair from wherever you are stationed. By default the tenant covers the processing fee; the fees page has the exact amounts.

The Free plan covers up to three properties. Create a free landlord account and set up the house before you leave.