How to Rent Out Your House: A Comprehensive Guide
Considering whether to rent my house in Des Moines, Washington? We understand this significant decision facing many homeowners today. With the rental market showing remarkable resilience—even amid economic fluctuations—renting out your property presents an attractive alternative to selling. The national rental vacancy rate hovers around 5.8%, while average rental prices have increased by approximately 15% over the past two years in desirable markets like Des Moines, Washington.
We've found that homeowners choose to rent their properties for numerous compelling reasons. Perhaps you're relocating temporarily but plan to return, or maybe current market conditions aren't ideal for selling. Many are discovering the benefits of maintaining ownership while generating passive income—a strategy that builds long-term wealth while preserving your real estate investment.
In this comprehensive guide, we'll walk you through everything you need to know about renting your house in Des Moines, Washington, covering essential topics from evaluating whether renting is right for you to managing your property efficiently for long-term success.
Pros and Cons of Renting Out Your House
Pros of Renting Your House:
- Steady Income Stream: We've seen rental properties in Des Moines generate consistent monthly cash flow, providing financial stability even during economic downturns. The average rental yield in this area currently ranges from 4-6% annually.
- Property Appreciation: While collecting rent, we continue to benefit from long-term appreciation of real estate values. Des Moines has seen property values increase approximately 8% year-over-year.
- Tax Advantages: We can deduct numerous expenses related to our rental properties, including mortgage interest, property taxes, insurance premiums, maintenance costs, and even depreciation.
- Mortgage Assistance: Rental income helps us cover mortgage payments, essentially allowing tenants to build our equity over time.
- Flexibility for Future Use: We maintain the option to move back into the property, sell when market conditions improve, or continue renting indefinitely.
- Portfolio Diversification: Adding rental real estate to our investment mix provides diversification beyond stocks and bonds, often with lower volatility.
Cons of Renting Your House:
- Property Management Responsibilities: We must be prepared to handle maintenance requests, collect rent, and address tenant concerns—or pay a professional to manage these tasks.
- Potential Tenant Issues: Even with thorough screening, we may encounter problematic tenants who pay late, damage property, or require eviction proceedings.
- Maintenance and Repair Costs: We need to budget for ongoing maintenance and unexpected repairs, which typically amount to 1-2% of the property value annually.
- Vacancy Risks: Periods without tenants mean no rental income while still covering mortgage, taxes, and other expenses. The current average vacancy period in Des Moines is approximately 21 days.
- Legal Compliance Burden: We must navigate complex landlord-tenant laws specific to Washington state and Des Moines municipal regulations.
- Reduced Liquidity: Unlike stocks or bonds, we cannot quickly convert our real estate investment to cash if needed.
Should You Rent or Sell Your House? Key Factors to Consider
Financial Considerations
- Potential Cash Flow: We calculate monthly rental income minus all expenses (mortgage, taxes, insurance, maintenance, vacancy allowance, and management fees). In Des Moines, single-family homes currently generate average monthly cash flow of $300-$700 after expenses.
- Return on Investment (ROI): We analyze both cash-on-cash return and total return including appreciation. Des Moines properties have historically delivered 8-12% annual returns when combining rental income and appreciation.
- Equity Position: If we have significant equity in the home, selling might provide capital for other investments. Conversely, if we're underwater or have minimal equity, renting may be the better option until values increase.
- Tax Implications: We consider potential capital gains taxes from selling versus depreciation benefits and deductions from renting.
Market Conditions
- Sales Market Strength: Des Moines is currently experiencing a seller's market with homes selling within an average of 14 days and often above asking price.
- Rental Demand: With a vacancy rate of just 3.2% in Des Moines, rental demand remains exceptionally strong, suggesting favorable conditions for landlords.
- Future Growth Projections: We analyze employment trends, population growth, and development plans. Des Moines continues to benefit from Seattle's economic expansion while offering more affordable housing options.
- Interest Rate Environment: Current low mortgage rates make refinancing an option for improved cash flow if we decide to rent.
Personal Circumstances
- Timeframe: If we're relocating temporarily (1-5 years), renting often makes more sense than selling and rebuying later.
- Management Capacity: We honestly assess our willingness and ability to handle landlord responsibilities or pay for professional management (typically 8-10% of monthly rent in Des Moines).
- Future Plans: If we might want to return to the property, renting preserves this option while potentially building additional wealth.
- Risk Tolerance: Renting involves certain risks that selling eliminates. We consider our comfort level with these uncertainties.
In Des Moines specifically, we've observed that properties held as rentals for 7+ years have typically outperformed immediate sales by 30-40% in total return, even accounting for management costs and occasional vacancies.
How Much Can You Rent Your House For? Pricing Strategies
Determining the optimal rental price for your Des Moines property requires a strategic approach. We've found that setting the right price from the beginning attracts quality tenants quickly while maximizing your return on investment. Here's our step-by-step process:
- Research Comparable Properties: We begin by identifying similar rentals in Des Moines neighborhoods like Redondo, Woodmont Beach, and Marine View. We look for properties with comparable square footage, bedroom/bathroom count, property type, amenities, and location. Currently, 3-bedroom single-family homes in Des Moines rent for approximately $2,200-$2,800 monthly, while 2-bedroom properties typically range from $1,800-$2,300.
- Utilize Online Rental Estimators: We leverage tools like Zillow's Rent Zestimate, Rentometer, and Redfin's rental data to validate our findings. These tools typically provide estimates within 5-10% of actual market rates in the Des Moines area.
- Apply the 1% Rule as a Baseline: While not definitive, we consider whether the monthly rent approaches 1% of the property's value. In Des Moines, properties typically rent for 0.6-0.8% of their value monthly.
- Factor in Property-Specific Features: We adjust our baseline price based on unique attributes:
- Puget Sound or mountain views can add $200-$400 monthly
- Updated kitchens and bathrooms typically command $100-$200 premium
- Finished basements or bonus spaces add $100-$150
- Fenced yards, especially in family-friendly neighborhoods, add $50-$100
- Consider Seasonal Timing: We recognize that Des Moines rental market follows seasonal patterns:
- Peak rental season runs May through September, when families prefer to move
- Winter listings (November-February) may require 5-10% price reductions
- Spring listings can often command premium pricing as demand increases
Preparing Your House for Rental: Repairs, Upgrades, and Compliance
Essential Inspections and Assessments
- Professional Home Inspection: We invest in a thorough inspection to identify any hidden issues before tenants move in. This typically costs $400-$600 in Des Moines but prevents costly surprises later.
- Roof and Structural Evaluation: We verify the roof has at least 5+ years of remaining life and address any structural concerns immediately.
- HVAC System Service: We schedule professional maintenance for heating systems, particularly important given the Pacific Northwest's damp climate.
- Plumbing Assessment: We check for leaks, water pressure issues, and drain functionality, paying special attention to areas prone to winter freezing.
- Electrical System Review: We confirm all outlets, switches, and fixtures work properly and meet current safety standards.
Critical Repairs and Updates
- Safety Features: We ensure smoke detectors, carbon monoxide detectors, and fire extinguishers are installed and functioning according to Washington state requirements.
- Water Damage Remediation: Given Des Moines' rainfall, we address any signs of water intrusion, checking window seals, basement walls, and roof penetrations.
- Pest Control: We conduct professional pest inspection and treatment, particularly important in older Des Moines neighborhoods.
- Appliance Maintenance: We service or replace aging appliances, recognizing that functioning appliances significantly impact tenant satisfaction.
- Flooring Repairs: We replace severely worn carpet or damaged flooring, often opting for durable luxury vinyl plank in high-traffic areas for longevity.
Strategic Upgrades for Maximum ROI
- Fresh Paint: We apply neutral, modern colors to walls and trim, typically costing $1,500-$3,000 but dramatically improving appeal.
- Kitchen Refreshes: Without full remodels, we update cabinet hardware, install new faucets, and replace dated light fixtures to modernize kitchens cost-effectively.
- Bathroom Improvements: We recaulk tubs/showers, replace toilet seats, and update vanity mirrors for a clean, fresh appearance.
- Lighting Upgrades: We install energy-efficient LED fixtures and ensure adequate lighting throughout, particularly important during Des Moines' darker winter months.
- Curb Appeal Enhancements: We invest in professional landscaping cleanup, pressure washing, and front door painting to create strong first impressions.
Step-by-Step Guide to Renting Out Your House
- Assess Your Financial Position
- Calculate potential rental income based on Des Moines market rates
- Estimate monthly expenses including mortgage, taxes, insurance, and maintenance reserve
- Determine cash flow projections and ROI expectations
- Consult with a tax professional regarding rental income reporting and available deductions
- Establish Legal Structure and Protection
- Consider creating an LLC for liability protection
- Increase liability insurance coverage to at least $1 million
- Review mortgage terms to ensure renting is permitted
- Check Des Moines and King County regulations regarding rental properties
- Create Comprehensive Lease Agreement
- Use Washington state-specific lease templates that comply with RCW 59.18 (Residential Landlord-Tenant Act)
- Include clear policies on rent payment, maintenance responsibilities, and lease violation consequences
- Specify utility responsibility arrangements
- Consider having an attorney review your lease for compliance with Des Moines regulations
- Market Your Rental Property
- Take professional-quality photographs highlighting key features
- Create compelling property descriptions emphasizing Des Moines amenities
- List on multiple platforms including Zillow, Trulia, Redfin, and Facebook Marketplace
- Consider local Des Moines community groups and bulletin boards
- Screen Potential Tenants Thoroughly
- Develop a standardized application process
- Conduct comprehensive background checks including credit, criminal, eviction, and employment verification
- Verify income (typically requiring 3x monthly rent)
- Check references from previous landlords
- Ensure all screening complies with Fair Housing laws and Washington state regulations
- Execute Lease Agreement
- Schedule lease signing (in-person or electronic)
- Collect security deposit and first month's rent
- Provide all required disclosures including lead paint (for pre-1978 homes) and mold information
- Document property condition with detailed move-in inspection report
- Implement Property Management Plan
- Decide between self-management or hiring a professional (Des Moines property managers typically charge 8-10% of monthly rent)
- Create maintenance request procedures
- Develop emergency response protocols
- Schedule regular property inspections
Finding Tenants and Screening Applicants Effectively
Marketing Your Des Moines Rental Property
- Professional Photography: We invest in high-quality photos that highlight spacious rooms, natural light, and special features. Properties with professional photos typically rent 70% faster than those with amateur images.
- Detailed Property Descriptions: We craft descriptions that emphasize desirable aspects like proximity to Des Moines Marina, Saltwater State Park, and local dining options.
- Video Tours and 3D Walkthroughs: Particularly effective in the Des Moines market, these virtual options allow prospective tenants to explore the property thoroughly before scheduling in-person viewings.
We distribute our listing across multiple platforms including Zillow, Trulia, HotPads, Apartments.com, Redfin, local Facebook groups, and Craigslist to maximize visibility.
Comprehensive Tenant Screening Process
- Standardized Application: We use a comprehensive application that collects all necessary information while complying with Washington state and federal fair housing laws.
- Income Verification: We require documentation proving income of at least 3x the monthly rent, reviewing pay stubs, offer letters, or tax returns.
- Credit Check: We evaluate credit history, looking for patterns of financial responsibility rather than focusing solely on credit scores. In the Des Moines market, we typically look for scores above 650, though we consider compensating factors.
- Background Check: We conduct criminal background screening in accordance with fair housing laws and Seattle/King County "Fair Chance Housing" ordinances.
- Rental History Verification: We contact previous landlords, asking specific questions about payment history, property care, lease compliance, and whether they would rent to the applicant again.
- Employment Verification: We confirm current employment status, position longevity, and income directly with employers.
Fair Housing Compliance
- Consistent Criteria: We apply the same screening standards to all applicants, documenting our process carefully.
- Objective Decision-Making: We base decisions on verifiable, documented criteria rather than subjective impressions.
- Protected Class Awareness: We understand Washington state extends fair housing protections beyond federal categories to include factors like military/veteran status and political ideology.
- Transparent Selection Process: We clearly communicate our selection criteria to all applicants upfront.
Legal and Financial Essentials for Landlords
Essential Legal Considerations
- Washington Residential Landlord-Tenant Act (RLTA): This comprehensive state law (RCW 59.18) governs rental relationships in Washington. We ensure our leases and practices align with specific requirements regarding notices, entry rights, maintenance responsibilities, and tenant protections.
- Security Deposit Regulations: Washington law requires deposits to be held in a separate trust account with written documentation provided to tenants. We must return deposits (or provide itemized deductions) within 21 days of move-out.
- Eviction Procedures: Washington has specific eviction processes with proper notice periods based on violation type (14 days for non-payment), court filing requirements, and restrictions on "self-help" evictions.
- Habitability Requirements: We maintain our Des Moines property according to Washington's warranty of habitability standards, including weatherproof structure, functioning systems, and clean premises.
Financial Considerations and Tax Implications
- Rental Income Reporting: We report all rental income on Schedule E of our federal tax return, including monthly rent payments, additional fees, and any tenant-paid utilities that pass through our accounts.
- Tax Deductions: We maximize legitimate deductions available to landlords, including mortgage interest, property taxes, insurance premiums, maintenance and repairs, professional services, travel expenses, and depreciation.
- Insurance Coverage: We maintain appropriate insurance protection including landlord property insurance, liability coverage, loss of rental income coverage, and possibly an umbrella policy.
- Record-Keeping Systems: We maintain organized financial records including income and expense tracking, maintenance records, tenant communication logs, and tax documents.
Ongoing Management: Tools and Tips for Success
Self-Management vs. Professional Property Management
Self-Management Considerations:
- Cost Savings: We retain the 8-10% of monthly rent typically paid to property managers in the Des Moines area.
- Direct Control: We maintain complete oversight of tenant selection, property maintenance, and financial decisions.
- Time Commitment: We realistically assess the 3-5 hours weekly average for routine management, plus additional time for emergencies and turnovers.
Professional Management Benefits:
- Expertise: Local Des Moines property managers bring market knowledge and established systems.
- Time Freedom: We're liberated from day-to-day responsibilities and middle-of-night emergency calls.
- Established Vendor Networks: Professional managers have reliable contractor relationships, often at preferred rates.
- Legal Compliance: They stay current with Washington's evolving landlord-tenant laws and handle documentation properly.
Essential Property Management Software and Tools
- Comprehensive Management Platforms: Tools like Avail, TurboTenant, and Zillow Rental Manager for online rent collection, maintenance requests, and lease signing.
- Financial Management Tools: Stessa or QuickBooks for tracking income, expenses, and generating tax-ready reports.
- Communication Systems: Tenant portals, dedicated phone numbers, and email templates for consistent, professional communication.
Developing Effective Maintenance Systems
- Seasonal Maintenance Schedule: We create a calendar for critical tasks like gutter cleaning, HVAC service, and roof inspections based on Pacific Northwest seasonal needs.
- Vendor Network Development: We maintain relationships with reliable providers for each service category and establish emergency response protocols.
- Inspection Protocols: We conduct regular exterior and interior inspections to identify issues before they become major problems.
Building Positive Tenant Relationships
- Clear Communication: We establish preferred channels and respond promptly to all inquiries.
- Respect for Privacy: We strictly adhere to Washington's 48-hour notice requirement for entry.
- Prompt Maintenance Response: We address emergency issues immediately and handle routine requests within 3-5 business days.
- Tenant Appreciation: We offer renewal incentives for excellent tenants and provide referral bonuses.
7 Common Mistakes First-Time Landlords Make and How to Avoid Them
1. Underpricing the Rental Property
The Mistake: Setting rent too low out of fear the property won't rent quickly or based on outdated market information.
How We Avoid It:
- We conduct thorough market research using multiple sources
- We evaluate comparable properties specifically in Des Moines neighborhoods
- We reassess pricing before each new lease or renewal
- We consider seasonal factors and property improvements when setting prices
2. Inadequate Tenant Screening
The Mistake: Rushing the screening process or relying solely on first impressions can lead to problematic tenants.
How We Avoid It:
- We implement comprehensive screening including credit, criminal, eviction, and employment verification
- We contact multiple previous landlords (not just the current one)
- We verify income documentation directly with employers when possible
- We establish consistent screening criteria that comply with fair housing laws
3. Using Inadequate Lease Agreements
The Mistake: Generic lease templates often miss Washington-specific requirements or fail to address important contingencies.
How We Avoid It:
- We use Washington state-specific lease agreements that comply with the Residential Landlord-Tenant Act
- We include clear policies on maintenance responsibilities, pet restrictions, and guest limitations
- We have our lease reviewed by a local attorney familiar with Des Moines and King County regulations
4. Neglecting Property Maintenance
The Mistake: Deferring maintenance to save money often leads to larger expenses, property damage, and tenant dissatisfaction.
How We Avoid It:
- We establish a preventative maintenance schedule tailored to Des Moines' climate
- We budget 1-2% of property value annually for maintenance and repairs
- We respond promptly to maintenance requests, prioritizing issues that could worsen
- We conduct regular inspections to identify problems before they escalate
5. Mishandling Security Deposits
The Mistake: Improper security deposit handling is one of the most common sources of landlord-tenant disputes.
How We Avoid It:
- We hold deposits in separate trust accounts as required by Washington law
- We conduct thorough move-in and move-out inspections with detailed documentation
- We return deposits within Washington's required 21-day timeframe
- We distinguish between normal wear and tear (not chargeable) and damage (chargeable)
Key Takeaways: Renting Out Your House Successfully
- Thorough Preparation Pays Dividends: Properties properly prepared for the rental market command higher rents and attract better tenants. Investing time and resources upfront typically delivers a return of 15-20% higher rental income in the Des Moines market.
- Market-Based Pricing Maximizes Returns: Properties priced within 5% of market value typically rent within 14 days, while overpriced listings can sit vacant for months, costing thousands in lost income.
- Tenant Screening Is Your First Line of Defense: Thorough verification of credit, income, employment, and rental history reduces problem tenancies by over 80%. The time invested in proper screening saves countless hours and expenses later.
- Legal Compliance Protects Your Investment: Understanding and following Washington state landlord-tenant laws, fair housing regulations, and local Des Moines ordinances helps avoid costly legal issues that can quickly erase rental profits.
- Systems and Technology Streamline Management: Leveraging property management software, maintenance schedules, and communication protocols creates efficient operations, reducing the time commitment by approximately 60% compared to ad-hoc approaches.
- Long-Term Perspective Builds Wealth: Approaching your Des Moines rental as a long-term investment recognizes that the greatest benefits often come from property appreciation and mortgage paydown over time. Properties in Des Moines have historically appreciated at 5-8% annually, building substantial equity for patient investors.
Renting your house in Des Moines, Washington can be a rewarding financial strategy when approached with the right knowledge and systems. Whether you're renting temporarily while waiting for market conditions to improve or building a long-term rental portfolio, the principles we've outlined will help you navigate the process successfully and transform your property into a valuable asset that generates both current income and future wealth.
