How to Rent Your House in 2024: The Ultimate Guide for New Landlords

There are many reasons you may wish to rent out your property. For example, you may have inherited a house but have no plans to live in it. Perhaps you’re moving into a larger home, but wish to rent your current house for supplemental, passive income. On the other hand, you may have invested in a great rental property but feel unsure where to begin in finding and maintaining great tenants. For many, renting out their house can be a great way to earn extra income.

Whatever your reasons, knowing how to rent your house before jumping in headfirst is essential. From preparing your home for renters, to familiarizing yourself with rental laws, there’s much to learn before transitioning from homeowner to landlord.

Here’s a complete guide to renting out your house, including tips to maximize rental income while minimizing the work you’ll have to do.

Why Renting Your House is a Smart Financial Investment

If you’re reading this article, you’re probably already familiar with the main benefits of renting your property. You’ll unlock a steady stream of passive income and help you build property equity over time. Additionally, renting allows you to retain ownership of the property and potentially benefit from any appreciation in its value.

Factors to Consider Before Renting Out Your House

Before taking on the responsibility of becoming a landlord, there are some important factors to weigh to guarantee a successful and rewarding experience. Here are a few things you may want to consider when beginning this journey:

Financial Readiness

One of the primary considerations is your financial preparedness. Evaluate your current financial situation, taking into account existing mortgage commitments and other financial obligations. Calculate the potential rental income your property could generate and compare it against anticipated expenses and expected property taxes.

Make sure that you have a clear understanding of your budget, factoring in maintenance costs, repairs, property management fees if applicable, and any unforeseen expenditures.

Market Demand

Consider local rental market dynamics before deciding to rent out your house. It's wise to research the demand and supply of rental properties in your area, taking note of prevailing rental rates and market trends while compiling an analysis of your competitors.

It’s important to understand the demographics of potential tenants and any seasonal variations in demand. Aligning your approach with the local rental market ensures that you strategically set competitive rental prices, tailor your property to appeal to the target demographic, and make informed decisions for a successful and lucrative landlord experience.

Time and Effort

Becoming a landlord requires a significant investment of time and effort. Consider the level of commitment you can dedicate to property management. Landlords are responsible for addressing tenant concerns, handling maintenance issues, and staying on top of legal and regulatory requirements.

Assess your availability and willingness to be actively involved in managing the property or whether you prefer to enlist professional property management services to alleviate some of the responsibilities.

Don’t Go It Alone When Learning How to Rent Your House

Any way you slice it, renting your house takes a lot of time, learning, and patience. This guide will make sure you know what each step entails to help you avoid costly trial and error along the way.

To make renting your property less of a headache and ensure you’re getting the most value possible while avoiding costly mistakes, we recommend partnering with a property manager for a few or all of the steps below. Here are a few ways they can help:

How Property Managers Can Help First-Time Landlords

• They keep you aware of and compliant with all relevant laws
• They help you set your price and market your property
• They find and screen applicants to find the right tenants
• They draft and management leasing paperwork
• They manage maintenance and repair need for your property
• They handle communication with tenants and vendors
• They discover new ways you can generate passive income

We’ll share more on how property management companies work in a later section. For now, let’s jump into the steps to rent your house.

How to Rent Your House Successfully: 7 Essential Steps

1. Research local laws

There are a few critical things to do before renting out your house. First, ensure your home is up to code and safe. Both state and local governments have a set of building codes in place that set minimum safety standards for housing conditions and are mandatory for landlords to abide by. Depending on your property's location, these codes may cover maintenance, sanitation, electrical, and fire safety. Research your local and state regulations and make necessary updates.

After this, the easiest way to guarantee your house is up to code is to schedule an inspection with your local building department. Some departments offer a free inspection service, while others may charge a small fee. Plus, many cities these days offer online scheduling for inspections. Ensuring your property is rental-ready and up to code can save you thousands of compliance fines. Make sure you have a professional walk through the house and give you their seal of approval.

2. Determine a competitive price

When determining how to rent your house, you must conduct market research and choose how to set your rental prices. First, evaluate different neighborhoods in your area. Next, identify how your neighborhood compares. For example, is your house near a good elementary school? Is it close to supermarkets and parks? Or is it further away from these kinds of amenities? These are factors to consider when setting your monthly rent.

Still wondering, “How much can I rent my house for?” You can look at rental websites and compare how other property owners are listing their rental properties.

Many landlords charge tenants a percentage of their home’s market value. In this case, rents typically land between 0.8% and 1.1% of the home’s overall value. For example, if a home is worth $180,000, the rent would be between $1,440 and $1,800 monthly. If your home is exceptionally well situated in a neighborhood, or if you’ve recently completed landscaping and made cosmetic changes, you can consider charging rent on the higher end of that range.

However, property values can sometimes rise faster than rent prices. If you notice that other property owners in your area aren’t setting their rent prices this way, you can set your rent price by comparing your house with other local properties and determining a fair price that way. You may also use our rental calculator here.

3. Create an advertising plan

Gone are the days when renting your house meant all you had to do was to put a sign in your yard. Today, you’ll likely have to find residents by posting your property on rental websites. Many websites offer free listing services, though you may find paid postings. Facebook Marketplace, Rentals.com, and Zillow are all good options.

You can list your property on various websites to ensure you get a good cross-section of applicants. Advertising and marketing can be challenging for the new landlord. Keep reading for more specific rental advertising and marketing tips.

4. Screen and meet prospective tenants.

After successful advertising, marketing, and maybe even a few in-person showings, you’ll have a stack of applications to sort through. Screening tenants can be a time consuming and difficult process. Sifting through applications and meeting prospective tenants can become a full time job.

Common courtesy and the Federal Fair Housing Act dictate that you must treat all prospective tenants equally. But, some factors will make some applicants more promising than others.

• Financial Information. Most importantly, you want a tenant who is financially responsible and has a good credit score.
  First, you should run a credit check on your applicants and ensure they have a relatively good credit score. In their credit report, you’ll also see their income-to-debt ratio. If their monthly debt payments are too high, even if they have a high income and a good credit score, you may be unable to rely on them to pay their rent on time.
  Next, you’ll want to collect proof of income. This can include copies of their pay stubs.
  
• Criminal History. After checking credit and income, you should perform a criminal background check. Some states prohibit landlords from discriminating against renters with criminal convictions. Be sure to look up your local renter and landlord laws.
  
• Know Your Rights (and Theirs Too). Once you’ve picked your perfect resident, you can begin developing your lease. First, however, you should familiarize yourself with local, state, and national landlord and tenant laws.
  Landlord-tenant laws exist to protect both renters and landlords. These laws dictate how landlords and tenants interact, what rights both parties hold, and what both parties are obligated to do. For example, every landlord has the right to charge a security deposit.
  However, how landlords store that money depends on state and local laws. So before drafting your lease, you must know the ins and outs of your state’s unique and federal rental laws.

5. Investigate insurance.

As a safety precaution, you should also require (or at least encourage) all renters to have insurance. You should detail this information in your lease. Renters insurance covers personal property theft or damage for your residents. Additionally, renters insurance includes liability insurance, so if they have visitors over and someone gets hurt, your tenant will be covered in case they get sued for damages.

Most importantly, your tenant’s insurance will pay for their temporary relocation if your home becomes uninhabitable due to a natural disaster or other catastrophes. While you can focus on repairing your house, your resident will have somewhere to live and won’t have to break their lease with you. Ultimately, this saves you the headache of finding a new tenant, and you won’t lose money as your property sits empty while being repaired.

Additionally, consider securing landlord insurance. Landlord insurance provides a safety net by offering coverage beyond what standard homeowners' insurance typically includes. It protects against potential financial losses resulting from rental property-related risks.

Purchasing this specialized insurance safeguards your investment and mitigates various risks, including property damage, liability claims, and potential loss of rental income. Landlord insurance typically covers structural damage, legal fees, and even certain medical expenses in case of tenant injuries on the property.

6. Develop a lease agreement

A lease, or rental agreement, sets up expectations for your tenants and informs them of property rules. Make your lease highly detailed to avoid any misunderstandings or conflicts in the future. Your lease can either be a fixed-term lease (a lease with a set end date) or a month-to-month lease, which automatically renews until either the tenant or landlord decides to end the rental agreement.

Many online resources exist to help you draft a lease, or you can hire a real estate attorney to help you through the process. However, every lease should include some basic information, including:

• Landlord’s name and contact information
• The address of the home
• All tenant names and contact information
• A list of included appliances in the house
• All utilities and services provided by the landlord
• All utilities and services the tenant is required to pay for
• Circumstances in which the tenant or landlord can terminate the lease early
• The rental amount, due date, and rent payment method
• Whether a security deposit is required, its value, and how it will be managed at the end of a lease
• Tenant parking information
• Permissions in a Lease Agreement

Your lease should also detail any special permissions and services. For example, you must describe whether you plan to allow tenants to keep pets on the property. If you plan to allow pets, you must include a section on pet deposits and rent.

7. Implement a management and maintenance strategy

Once the lease is signed and tenants are moved in, a landlord’s work has only just begun. Next, it’s time to manage and maintain your real estate investment. Landlords should expect to conduct regular inspections, repairs, and upgrades to ensure the property remains in good condition and retains its value.

Establishing a system for handling tenant requests and promptly addressing any issues is also essential. Consider hiring a property manager to help on the maintenance front, especially if you have another full-time job.

Other Tips for First-Time Landlords

Maximize Rental Investment and Income—With Less Work

While you now know how to rent your house, it may be overwhelming to think of managing everything mentioned so far. While executing the leasing process, upkeep, and managing a rental house yourself is possible, many landlords partner with a local property manager.

While new landlords need to learn the particulars of managing a rental property from scratch, a property manager will already have the expertise and experience to turn your private residence into a profitable rental property quickly. They know the local market, what to list your rental for and where to list it, and how to find quality tenants.

In addition, a property manager can handle your responsibilities as much or as little as you’d like. This means you call the shots regarding how passive or active of a landlord you want to be.

Want to find and vet tenants but don’t want to deal with maintenance? A property manager can fill in the gaps. Prefer to leave the whole tenant screening and contract creation process to an expert? A property management company has you covered.

If making your rental property a genuinely passive income stream sounds appealing, hiring a professional property manager can be an excellent option. Doing so will also make following the tips below a lot easier.

Preparing Your Property For Rent and Showings

It may sound obvious, but there are a few things to do before renting out your house. First, you’ll need to take some time to spruce it up a bit and make sure it’s ready for new residents.

Not only does this step in the preparation process ensure that your house is up to code, but it will also help you attract renters. Plus, when your house looks refreshed and updated, you can raise the rent and turn a higher profit.

• Renovations and Upgrades. After you’re finished making sure your house is up to code, you can move on to making renovations and upgrades.
  The pandemic changed the way that people live in their homes. Many office workers have switched to working at home permanently.
  Consider transforming a spare bedroom into a functional office space by installing shelving or a desk nook to attract renters. If you have access to fiber-optic internet in your area, consider having it installed, as well. Fast internet has proven to be vital to at-home workers.
  
• Landscaping. You know what they say: you only have one chance at a first impression. When prospective tenants visit your single-family home, you’ll want them to be impressed when they step foot on your property.
  Powerwash your sidewalks and gates to give the house a boost in curb appeal. You should also consider livening up the outside of the property by adding flowers and shrubs, removing weeds and stumps, trimming trees, and mowing the lawn.
  An excellent first impression can make prospective tenants eager to fill out the application and rent your property immediately!
  
• Preparing Your House for Showings. When getting your house ready for showings, just think of it this way: company’s coming over. Clean your house from top to bottom. Dust, vacuum, mop, wipe down counters, and clean off appliances.
  Next, you should stage your home. While you can certainly show the house empty of furniture, you want prospective tenants to be able to picture themselves living in your house. The easiest way to do that is to help them visualize what the home looks like, furnished and styled.
  Lastly, you’ll want the house to feel welcoming. You can use the old realtor’s trick of baking cookies in the oven just before the showing. Alternatively, keep the house well-lit and the thermostat set to a comfortable 70 degrees.

Finding Great Tenants for Your Property

Many new landlords start their real estate journey by Googling “how to rent your home,” which can lead to instant information overload. Because these days, there’s no shortage of options for digital real estate tools.

Our favorite is Buildium, which is recommended by major software review sites, including Capterra and G2, if you’re looking for better ways to market your rental property online.

However, technology is just one step in the right direction in finding tenants. You can also utilize tried-and-true digital marketing tactics to advertise your property, attract potential renters, and secure great tenants, such as:

• Investing in SEO
• Posting on multiple rental websites
• Marketing on social media
• Managing your online reputation
• Offering other incentives, such as discounts for referrals or $100 off the first month’s rent

Proper Tenant Screening

Property owners and managers should always use a quality screening service or method to screen potential rental tenants. However, if you don’t have a screening method you’re comfortable with, read on to learn key steps in the process.

• Pre-screen tenants in rental applications. This will determine if an applicant meets the basic requirements for tenancy. The Fair Housing Act requires landlords not to screen tenants based on ethnicity, gender, disability, family status, or religion.
• Run a credit and background check. When evaluating credit scores, it is essential to consider recent foreclosures, large credit card debt, and late payments. Additionally, any criminal records should be investigated.
• Verify income and employment of prospective rental tenants. Best practice says monthly rent should not exceed one-third of a prospective tenant's gross monthly income.
• Check all previous addresses, landlords, and evictions to ensure the information included on the application is correct.
• Interview in person. Afterward, the landlord can decide whether or not to move forward based on all relevant information. The interview can be as formal or informal as you like so that you can create a clear picture of the prospective applicant.

Managing and Maintaining Your Rental Property

Regular maintenance constitutes a significant portion of a landlord’s responsibilities during a lease. Required maintenance varies slightly from state to state, so ensure you’re current on local laws.

In general, a landlord is responsible for anticipating tenants’ needs relating to property use. This includes regular, scheduled maintenance as well as repairs when emergencies arise.

To stay on top of regular maintenance every six months, take the time to complete this checklist for every property or unit:

• Replace batteries in smoke alarms and carbon monoxide detectors.
• Replace all air filters. Even if they don’t desperately need to be replaced, this will ensure your HVAC system functions at the highest efficiency possible.
• Check property efficiency. Compare utility bills from the same month of the previous year to quickly assess if they’re still in top working condition. This is especially important if you include utility bills with tenant rent.
• Building maintenance. If you don’t visit the property often or live nearby, you don’t want to go more than six months without an in-person inspection. Once a month is best, but you may have a property that isn’t convenient to visit regularly. Ensure common areas are clean, laundry units are all in working order, security is functioning correctly, the lawn and garden are taken care of, and the roof and gutters don’t have any leaks or weak spots.
• Talk to Tenants. This doesn’t have to be a formal meeting but check-in to see how everything is going in person or via email. They’ll know the day-to-day issues you may not catch in a routine inspection.
• Address seasonal needs. Depending on your local climate, you’ll also want to keep up with seasonal conditions. If you’re somewhere with a lot of snow to contend with, these resources may be helpful:
  A Step-by-Step Guide to Winterizing Your Rental Property
  How to Pick a Generator to Prevent Winter Power Outages: Frequently Asked Questions from Landlords

By locating minor problems through regular maintenance and inspection, you ensure you won’t have to fix big (aka more expensive) problems later.

Learning How to Rent Your House Doesn’t Have to Be a Challenge

Deciding to rent your property can be exciting and overwhelming. But, with these tips in mind, you should be ready to kick-start your career as a rental property owner in no time.

And if you’re interested in hiring a property management company to assist in renting and managing your house, you can get started here.