Turning your current Central Iowa home into a rental instead of selling it is one of the most common questions I get from move-up buyers — and the answer is almost always a math question, not a feelings question. You already own the asset, the loan is likely at a rate you can't replicate today, and you know the property's history better than any investor ever will. Here's how to decide honestly whether keeping it makes sense.
The most common mistake is comparing rent to the mortgage payment. Those aren't the two numbers that matter.
Your actual monthly cash flow is rent minus everything: principal, interest, taxes, insurance, and then the expenses a mortgage statement never shows you.
Vacancy. Budget roughly 5–8% of gross rent. Central Iowa turns over reasonably well, but a unit that sits for a month between tenants costs you more than a $50 rent bump earns you in a year.
Maintenance and repairs. A common planning figure is 1% of property value per year, or 5–10% of rent. Older homes in Des Moines' established neighborhoods land at the higher end. A ten-year-old house in Ankeny or Bondurant lands lower — for now.
Capital reserves. Roofs, HVAC, water heaters, and driveways don't fail on a schedule that respects your budget. Set aside for them monthly or you'll be financing them at a bad moment.
Property management, if you use it. Typically 8–10% of collected rent, plus a leasing fee. If you're moving out of the area or don't want the calls, price this in from the start rather than assuming you'll self-manage forever.
Insurance changes. A landlord policy is not a homeowner policy, and it usually costs more. Call your agent before you decide, not after the first tenant moves in — a claim on the wrong policy type can be denied.
Run that full stack. If the number is still positive, you have a real rental. If it's slightly negative but the loan is paying down meaningfully each month, that's a judgment call. If it's meaningfully negative, you're subsidizing a tenant, and that's a different decision than the one you thought you were making.
This is the honest reason so many Central Iowa homeowners should at least run the numbers.
If you're carrying a mortgage from the low-rate window, that financing is an asset in itself. You cannot go buy a comparable rental today and get that payment — an investor purchasing the same house now would face both a higher rate and a higher investment-property down payment requirement. Keeping the house keeps the loan.
The corollary matters too: if your current loan is at a market-comparable rate and the property doesn't cash flow, there's much less reason to hang on to it out of sentiment.
Before any of the math matters, confirm you're actually allowed to do this.
Occupancy requirements. If you bought with an FHA or VA loan, you agreed to occupy the property as your primary residence — commonly for at least twelve months. Moving out and renting before that window closes can be a violation of your loan terms. Read your note, and if you're unsure, ask your lender directly.
HOA covenants. A growing number of Central Iowa subdivisions cap the percentage of homes that can be non-owner-occupied, impose a minimum lease term, or require the association to approve tenants. Pull the covenants and read the leasing section before you list the house for rent.
City rental registration. Several Central Iowa cities require rental properties to be registered and inspected on a cycle. This is a routine, inexpensive step — but it's not optional, and it's better handled up front than after a complaint.
There's a real deadline hiding in this decision, and it's worth understanding before you commit.
When you sell a home you've lived in as your primary residence for at least two of the previous five years, a substantial portion of the gain can typically be excluded from capital gains tax. Convert that home to a rental and hold it long enough, and you eventually fall outside that five-year lookback — at which point selling becomes a fully taxable event.
On the other side of the ledger, a rental unlocks deductions a primary residence doesn't: depreciation, repairs, insurance, management fees, mileage, and more. Depreciation in particular is powerful while you hold it — and it gets recaptured when you sell.
This is exactly the conversation to have with a CPA before you move out, not at tax time the following April. I'm not a tax advisor and I won't pretend otherwise; what I can tell you is that the sequencing of this decision has real dollars attached to it, and the people who get burned are the ones who decided first and asked later.
A house you loved living in isn't automatically a house that rents well. The features that make a strong Central Iowa rental are specific:
Durability over finish. Luxury finishes rarely earn proportional rent. They just cost more to repair.
The features tenants actually pay a premium for here: in-unit laundry, an attached garage, central air, and off-street parking. A high-end kitchen backsplash is not on that list.
Low-maintenance exterior and yard. Every square foot of landscaping you loved is a square foot somebody now has to maintain — and if the lease says that's you, it's a recurring cost.
Location relative to demand. Proximity to Iowa State in Ames, to the interstate corridor for Des Moines commuters, or to major employers drives your applicant pool more than anything inside the house.
Basement and floor plan. A separate entrance or a legal second unit changes the math entirely — that's a house-hacking asset, not just a rental.
You don't have to choose between "sell it" and "landlord it forever."
Keeping the house and renting it for two or three years while you settle into the new one is a legitimate strategy. You capture some appreciation and loan paydown, you find out whether you actually like being a landlord, and — if you sell inside that five-year window — you may still preserve the primary-residence exclusion. Run the exact dates with your CPA, but the option is real.
The other underused path: a cash-out refinance or HELOC on the current home to fund the down payment on the next one, rather than selling to access the equity. This keeps the asset and the low-rate first mortgage intact. It also raises your leverage and your payment, so it's not for everyone — but it's worth pricing before you assume selling is the only way to get your equity out.
Run the full expense stack, not the rent-versus-payment shortcut. Confirm your loan and your HOA allow it. Talk to a CPA about the five-year window before you move out. Then ask whether the house is genuinely a good rental or just a house you're attached to.
If the answer is yes on all four, you've just added a cash-flowing asset without buying anything — which is the cheapest way anyone in Central Iowa acquires a rental.
I'll build the actual numbers with you — rent comps for your specific block, the full expense model, and a side-by-side against what selling nets you today. No pressure either direction; the math usually makes the decision obvious once it's on paper. Reach out and let's run it.
Jackson Krile | Flanders Team | RE/MAX Real Estate Center
515.490.8614 · [email protected]
Let's talk through your specific situation — no pressure.