If you have an unoccupied home, you should know how to rent out your house.
On the surface, learning how to rent your house seems like an easy task: find reliable people and collect their rent payment around the same time every month. However, the logistics of renting a property and being an upstanding landlord are a bit more involved.
Here, we’ll walk through all the steps of how to rent a house successfully to qualified individuals or families.
How to Rent Out Your House: Preliminary Steps
We’re assuming you already have a suitable home to rent – but if not, following the link can give you some insight into investing in rental property. Check resources for your local areas for the best properties. If you’re considering relocating for a more ambitious endeavor, check out the best rental markets for investors.
Rules for Renting
With a house in your possession, you’ll first want to familiarize yourself with the rules for renting out a house. You’ll also need to check with local authorities to understand requirements for how to rent a house in your area and any organizations like HOAs or condominium associations, when applicable.
Does Rental Income Count as Earned Income?
Assuming you’ve crunched some numbers already, you need to also understand how rental income is taxed. Rental income is taxed like any other income, though various tax deductions become available to businesses, such as LLCs and S Corps, in addition to those who file as self-employed (i.e., a sole proprietor who files using a social security number vs an EIN).
8 Steps On How to Rent a House
The following will provide a simple guide that will teach you how to rent out your house.
1. How Do You Calculate Fair Rental Value?
You can typically list your property as you check on other rental listings in your area.
A few factors you’ll want to consider when calculating a fair rental price are the cost of other nearby, similar-sized properties with similar amenities. Ideally, you’ve renovated and updated the property to modern standards, as this will allow you to successfully obtain an amount on the higher end.
For areas that have been neglected for some time, understand you’ll likely want to make some concessions on how much you charge for rent. If you’re in this business for the long haul, you’ll find that many areas under redevelopment will produce much higher returns in the later stages of such efforts.
Once you’ve answered the question of, “How much can I rent my house for?” you’ll have plenty of options for digitally listing your property, like using Movoto. Many areas and neighborhoods have dedicated groups for reselling goods, vehicles, and properties. Just ensure you follow the group rules as well when listing your property in social media communities.
And remember: the Internet is full of trolls, and you will likely encounter both valid and unwarranted criticisms when posting on social media. Learn to recognize the difference, and don’t engage those who are clearly trying to get a rise out of you.
2. Have an Organized, Well-stocked Supply of Commonly Used Items
For the DIY landlord, this point regarding how to rent out your house is rarely mentioned but extremely useful for those who want to keep costs to a minimum while diligently maintaining their rentals.
After you’ve completed a repair or renovation, you should hold onto as many useful materials as possible – whether it’s trim, shingles, ceramic tiles, or other items you’ll surely need again.
Even when renting to most easy-going tenants, things can happen. Severe weather can destroy roofing or siding. Pets in the home can damage flooring and trim. Painted walls will become blemished.
If the home where you reside is close to your rentals and is adequately sized and zoned, consider building a structure like a large garage (if you don’t already have one) or pole barn to store extra materials. If you have enough basement space, this works as well, though it is more of a hassle to lug items up and down stairs.
Keeping extra supplies on hand and organized makes it much simpler and less expensive to tackle both emergency repairs and standard maintenance tasks quickly.
Finally, keep an eye on social media groups and trustworthy resale shops for quality, used appliances. When you have space and find great deals, it doesn’t hurt to have extras on hand. Being able to fix or replace a refrigerator, water heater, or other appliance in short order sets great landlords apart from the rest.
3. Screen Tenants Thoroughly
Knowing the logistics of how to rent out your house is one thing, but finding a responsible tenant is a crucial next step – and it all starts with good screening. Review tenant screening reports that include credit, eviction history, and criminal background checks. Reach out to past landlords for references to get a well-rounded picture of each applicant.
This will help in the evaluation process, but understand that bad remarks don’t always mean a bad renter, nor does a clean history ensure an ideal tenant. This will become easier with time but understand there will always be some risk involved.
How to run these checks is a bit beyond the scope of what we’ll cover here. However, there are highly trustworthy systems like those offered by Checkr that you can use to easily screen prospect backgrounds for a low fee.
There are many tools to check credit on the web, but it depends on how rigid you want to be. Some landlords find that having tenants install Credit Karma from Intuit and screenshotting their scores is more than sufficient. Another cost-saving strategy is to simply have a prospect request and copy a credit report from one or more credit agencies, which they can acquire quickly and for free.
4. Streamline Your Application Process
Responding quickly to applications is important in the process of how to rent your house, especially when dealing with multiple applicants or paper forms. But prioritizing qualified tenants shouldn’t slow you down.
Paper applications still work, but for the best results, offer digital applications for easy sharing and processing.
You can use full management systems like Avail, TenantCloud, or one of the many other platforms available on the web. Or, simply plug your application into a master Google Doc and create a shared copy to share with your prospects. Further, using Google Drive will allow you to easily and securely coalesce documentation in an accessible location.
5. Secure Your Agreement with a Strong Lease
A solid lease agreement is a necessary part of how to rent out your house. It protects both you and your tenant by outlining responsibilities, expectations, and legal obligations. Ensure your lease complies with local, state, and federal regulations.
You can have a local lawyer draft a boilerplate lease or rental agreement that’s as airtight as possible. You can also find a slew of documents on the web you can edit to your liking.
Generally speaking, most judges who handle evictions and other property-related matters approach these matters with common sense, meaning you don’t need an impressive legal document, just something sensible and fair.
6. How to Rent a House And Maintain It with Ease
Once you have a great tenant, prioritize maintenance to keep your property in top shape. This ensures a comfortable living space for your tenants and protects your investment.
Aside from keeping supplies, keep track of maintenance routines and costs by keeping documentation together. Many property management platforms have these tools built in, such as the two we mentioned earlier.
If you’re just getting started on your journey into how to rent out your house, you can also create your own spreadsheet using Google Sheets to keep costs at a minimum. Simply create a unique sheet for each property where you track various pieces of data and make notes of where related supplies can be found.
7. Collect Rent On Time
Reliable rent collection is crucial when renting out your house. While traditional checks work, online payments offer advantages for both you and your tenants.
If you collect cash or checks, simply plug the amounts into your Google Sheet or manually add them to a property management platform.
There are many different, viable ways your tenant can pay you. If you’re not using a comprehensive management platform where tenants can make digital payments, just make sure to track everything with good notes.
As we mentioned earlier, things can happen as you tackle how to rent your house. Make sure you have open communications with tenants and make reasonable accommodations when circumstances prevent an otherwise good tenant from making an on-time payment. Consider offering everyone a reasonable grace period (e.g., 5 to 10 days to pay rent in full without repercussions), as this will save you from unneeded conversations about what should be a reasonable request.
8. Safeguard Your Investment with Insurance
Landlord insurance protects you from financial risks. Consider coverage for property damage, loss of income, and liability, even if you already have homeowners insurance. Though it can offer similar coverages, landlord insurance can help cover costs that can’t be easily recouped using traditional homeowners insurance.
By following these simple steps, you should have a good idea of how to rent out your house, as well as some useful tips to streamline the process!
