A friend of mine recently asked what it takes to rent your house in Des Moines, because I just went through the process last year (I guess I’m still going through it). So here’s what I told him, and I’ll add to this as I learn more.
I spoke with a couple management companies and did some research. I hear the standard is that they charge 10% of the rent as their management fee. In the end, I decided to use a management company only to write/sign the lease and do background checks on the renters, and manage the property myself, with the help of my neighbors. I used Artisan, because they are close to my house. They offer a la carte services, so if I do need them in the future, I can just call them and pay a one time fee. They have 2 websites, not sure why. The 2nd is the one you want.
If you want to be completely legal and everything, you have to get your house inspected by the city to get a Certificate of Inspection. Since my house in Des Moines, I went down to the neighborhood inspections division downtown (link below), they sign you up for an inspection, they give you a checklist to follow to make sure your home is up to spec. The inspector comes out, marks down anything not up to code, you have a few weeks to fix it, then they reinspect. It cost about $150, and you are legal for 3 years.
Here are the things that are most important to the inspectors. Most you can prepare for.
1. All electrical, plumbing, and HVAC systems are up to code
2. Every floor and every bedroom has to have a working fire detector
3. Hand rails on the stairs must go the full length of the stairs, and must have a 90 degree connection to the wall (i had to fix mine)
4. Windows must be in good working order.
5. The paint on inside and especially outside must be in good condition, no major chipping.
I told my insurance company ahead of time that I was renting my place so they could redo the policy. The coverage is different if you are renting it out, and I had to get an additional fire policy. When I did that, they made me get a separate electrical inspection because of the age of my home. I had the name and number of a good electrician if anyone needs one. He didn’t find any issues with my inspection, so I think it’s just a formality.
I found this link that has some common landlord/tenant topics particular to Iowa.
At this point, I don’t have any idea what the tax implications are for collecting rent. As I understand it, Rent is income, so you report it that way, but you also can depreciate your house for the first 10 years of rental, so it offsets. I have a tax guy, and I’m going to let him work out the details. He’s very good (if anyone wants his number).