Putting Your House up for Rent in DC: A Step by Step Guide

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Renters make up 58 percent of households in the District of Columbia, in part due to the large population of college students and political aides. If you own property in the area and have been thinking about putting your house up for rent, it’s important to know the process and follow it.

Unlike in some locales, you can’t just put a “for rent” sign out and start moving people in. DC is one of the most tenant-friendly areas in the country. As a result, you need to get certain paperwork out of the way before you can consider renting.

Let’s take a look at the steps to renting out a house or condo in DC to keep you operating above board.

Get Your Paperwork in Place

If you have a rental house or other property in another state, this is the step that will be most different for you. Unlike most places, DC requires licensing, registrations, and inspection of all rental properties. You are considered a residential rental business and must have the proper paperwork for such before you can start renting.

It’s worth noting that this is for long-term rentals. There are different rules for how to rent out your house for short-term and vacation rentals.

Licensing and Certification

Step one is to get a basic business license for every rental unit you have. The license you choose is based on your type of rental property.

  • One-family – single-family homes, townhouses, condos, individual rooms
  • Two-family – two-unit building or basement apartment
  • Apartment – apartments in buildings with three or more units, even if vacant

Your license is good for two years once issued. As part of the licensing application, you’ll need to show your certificate of occupancy and a Clean Hands Self Certification, which says you don’t owe any money to the DC government.

Registration

Next, you’ll register with the Rental Accommodation Division of the Department of Housing and Community Development related to the rent control laws. Even if you think you’re exempt, you still have to register. You can claim an exemption after you get registered.

The two common reasons for exemption are:

  • Own no more than four units
  • Building constructed after 1975

The DC rent control laws relate to when and how much you can raise the rent. You have to be registered with the RAD, give a 30-day notice of the increase, and can’t have raised it in the past 12 months.

You’ll also need to register your business with the DC Office of Tax and Revenue, which makes sure you’re properly paying all taxes. You’ll need form FR-500 to do so.

Inspection

Now that you have your license and are properly registered, it’s time for the DCRA inspection. This must be completed within 45 days of getting your license or you’ll have to start the process over again.

The inspector is looking at 17 specific things related to the state and condition of the house, along with whether you have proper certification for water heating, central heating, and air conditioning systems.

Draft Your Lease

It’s good practice to have a written rental agreement with your tenants. You’ll need to give them a copy within seven days of signing, and the lease should include the following at a minimum:

  • Description of the unit
  • Duration of tenancy
  • Amount of rent owed
  • When rent is due

In DC, the lease cannot include any kind of waiver of your liability for injuries on the property caused by your negligence or lack of proper maintenance. You can’t ask tenants to waive their rights to a jury trial or to pay your court costs or legal fees.

The lease can include details for late fees, which can’t exceed 5 percent of the rent amount. Note that you need to explicitly state the maximum amount that can be charged to charge at all.

Set Your Rent

Spend some time doing a market analysis to see what the going rate is in your area for similar rentals. This means size, location, and number of bedrooms and bathrooms, at a minimum.

When you set the rent, take into account all your expenses like mortgage, insurance, and maintenance costs to ensure you’re getting enough to cover everything.

It’s important to ensure you set the rent high enough to start since you will be limited in how much you can raise it thanks to the rent-control laws. You’ll only be able to increase it by an amount tied to the Consumer Price Index and no more than 10 percent of the previous amount. If your tenant is elderly or disabled, you’ll be restricted to the CPI for raises.

If your property sits vacant, you can increase the rent by up to 10 percent or the rate of a comparable unit before you lease it again. The total increase can’t be more than 30 percent, and you won’t be able to raise it again for a year.

Find Your Tenants

The last step to answering the question of “how to rent my house” is to find good tenants to live there. It starts with how and where you advertise it. Make sure your listing is accurate and complete and includes your rental criteria like credit score or pet policies.

Make sure you get up-to-speed on what questions you can and can’t ask during tenant interviews. Your questions should be standardized as well to ensure you ask every applicant the same thing.

The formal screening should include a criminal background check, credit check, and verification of income. You want to be sure the tenant you choose can pay the rent and has a history of paying on time.

Interested in Putting Your House up for Rent in DC?

Becoming a landlord in Washington, DC, involves a lot more than handing someone a key and getting money in return. Putting your house up for rent should start with getting all your legal ducks in a row, including proper licenses, inspections, and applications. After that, you can get your lease together, set your rent rate, and begin screening tenants.

Need help running your Washington, DC, rental properties? Contact us for a free market analysis or to learn more about our residential real estate services in DC, Maryland, and Virginia.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.