Turning Your Home Into Your First Rental

Heidi Robbins

Aug 31

3 min read

Updated: Oct 5

Keeping your home and renting it out when you PCS is one of the most common ways military families build wealth. It's also a real business with real legal duties. As a military spouse for more than 30 years and an Arlington Associate Broker with 560+ transactions, I've helped many families make this choice, and the ones who do well treat it like a business from day one.

This article is general information, not tax, legal or financial advice.

If you're still deciding whether to rent or sell, start with my rent out or sell guide.

Can you keep a VA-financed home as a rental?

Yes, as long as you bought it honestly as your primary residence. VA loans require you to intend to live in the home when you buy. After that, a PCS doesn't force you to sell. You can't buy a home with a VA loan purely as an investment. You can buy a building with up to four units, live in one, and rent the others.

Run the numbers the lender's way

Before you count on rent to cover the mortgage, list every cost:

Mortgage payment, property taxes and a landlord insurance policy (your homeowners policy won't cover a rental)
HOA or condo fees
Property management, if you hire it
Repairs, maintenance and periodic replacements like a water heater or roof
Months with no tenant

If you plan to buy again at your next duty station, ask your lender early how they'll treat the rental. Lenders have their own rules for counting rental income, and VA underwriting looks at your debt-to-income ratio and residual income. Plan for a cash reserve so one vacancy or repair doesn't turn into a crisis.

Property management

If you're moving out of the area, a property manager is usually worth it. Get written quotes from at least two or three companies, and compare the monthly fee, leasing fee, lease renewal fee, how they handle repairs and what their contract says about ending the relationship. Ask how many military owners they work with and how they handle a tenant's PCS orders.

Virginia landlord rules you need to know

Security deposits: In Virginia, you can't collect more than two months' rent as a security deposit. When the tenant moves out, you must send an itemized statement and any refund within 45 days.
Military tenants: Virginia law and the federal Servicemembers Civil Relief Act let a service member tenant end a lease for PCS orders, certain deployments and some other military reasons, with written notice and a copy of the orders. Build that into your expectations if you rent near a base.
Fair housing: Virginia's Fair Housing Law protects more groups than federal law, including military status and source of funds. Use the same written screening criteria for every applicant, and apply them the same way.
Lead paint: For homes built before 1978, federal law requires a lead disclosure and pamphlet before the lease is signed.

Taxes

Rental income is taxable, and you can deduct expenses like mortgage interest, repairs, insurance and management fees. You also take depreciation, which reduces taxes now but is taxed when you sell. Renting the home can also affect whether you qualify to exclude the gain on your old home when you sell. Military members have extra time under the rules. My capital gains guide walks through it, and a tax pro or MilTax can help with your situation.

Getting the house rent-ready

You don't need a renovation, but a clean, safe, well-maintained home rents faster and attracts better tenants. Fresh neutral paint, working smoke and carbon monoxide detectors, serviced HVAC, a deep clean and simple, durable finishes go a long way. Take dated photos of every room before move-in, and give the tenant a written move-in inspection report.

Short-term rentals

Airbnb-style rentals aren't a simple workaround in Northern Virginia. In Arlington, a short-term rental has to be your primary residence for at least 185 days a year, and you need a permit. In Fairfax County, you need a permit, you have to live there, and you can rent it short-term for no more than 60 nights a year. If you're moving away, plan on a standard lease.

In Northern Virginia

Steady demand from the Pentagon, Fort Belvoir, Quantico and JBMHH keeps many local rentals filled, but rents and fees vary by neighborhood. I'm glad to pull comparable rents for your home and talk through what keeping it would really cost.

Sources: Va. Code § 55.1-1226; Va. Code § 55.1-1235; U.S. Department of Justice, SCRA; Virginia DPOR, Fair Housing; IRS Publication 527; VA.gov, purchase loan; Arlington County short-term rentals; Fairfax County short-term lodging.