How to Rent Out Your House: A First-Time Landlord Guide

Key takeaways:

• Calculate potential rental income, expenses, and maintenance costs before deciding whether renting is financially worthwhile.
• Review mortgage restrictions, local landlord-tenant laws, insurance requirements, and property conditions before listing your house.
• Use consistent tenant screening, a clear lease agreement, and organized management practices to protect your investment.

Renting out your house can provide an additional source of income while allowing you to maintain ownership of your property.

For homeowners who own multiple properties or aren’t ready to sell, renting out all or part of a home can be an appealing alternative. With more home sellers than buyers in today’s market and renting remaining more affordable than buying for many households, keeping a property as a rental may be worth considering.

However, becoming a landlord comes with financial, legal, and ongoing management responsibilities. Before listing your home for rent, you’ll need to evaluate potential rental income and expenses, review local rental regulations, prepare the property for tenants, and establish a screening and leasing process.

Understanding how to rent out your house can help you decide whether it’s the right financial and practical move for you.

1. Check whether you can legally rent out your house

Before you start any of the major planning, confirm that your mortgage, HOA rules, zoning regulations, and applicable local laws allow you to rent out your property. Key requirements to review include: 

• Mortgage terms and lender requirements: Some mortgages include owner-occupancy requirements or restrictions on converting a primary residence into a rental. 
• Zoning and permit requirements: Local regulations may require rental licenses, property registration, inspections, or compliance with occupancy limits. 
• Fair Housing laws: The Fair Housing Act prohibits housing discrimination based on protected characteristics. State and local laws may include additional protections. 
• Landlord-tenant laws: Familiarize yourself with applicable requirements for property conditions, security deposits, notices, tenant privacy, and other tenant rights. 
• HOA rules: Your homeowners association may have specific rules for the neighborhood regarding rental properties – or prohibit rentals altogether. 

“If the property you want to lease is in an HOA, homeowners should check their governing documents for rental restrictions, leasing requirements, tenant registration, or other rules before renting,” shares the team at MicroHOA. “You may be required to provide information about the tenant and lease, or even get approval and pay administrative costs to the HOA. Most covenants hold the owner responsible for rule infractions and maintenance no matter who lives at the property, so make sure the tenants understand the community rules they’ll be expected to follow.”

“The fines for breaking HOA or condo association rules land on you, not your tenant,” adds Doug McLain, owner of Dynamite Management. “You’re also still on the hook for assessments or any damage your tenant causes to the common areas. A quick call to your association’s manager before you sign a lease can save you from an expensive surprise.”

2. Decide if renting out your house is the right move

Renting out your house can generate income and allow you to retain ownership, but it also comes with financial responsibilities and ongoing work. This is especially important to consider if you are deciding between selling and renting your house, which is a common struggle in today’s housing market.

Weigh the pros and cons of renting out your house

Potential benefits include monthly rental income, long-term property appreciation, and retaining the option to sell later. However, landlords also face vacancies, unexpected repairs, property damage, and management responsibilities.

Choose a long-term, short-term, mid-term, or room rental

“Pick your rental strategy before you prep your home,” suggests the team at Evolve, a vacation rental management company. “Owners often default to long-term renting without asking whether it’s the best return on their investment. In many markets, short- and mid-term stays can earn much more than traditional 12-month leases do. They also provide the flexibility to use the home yourself. Of course, you’ll need to run your rental more like a hospitality business, which a company like Evolve can help you do confidently.”

The right rental arrangement depends on your financial goals, property, and local regulations.

• Long-term: Typically leased for six to twelve months or longer.
• Short-term: Often rented for days or weeks, like a vacation rental for example, subject to additional local restrictions.
• Mid-term: Commonly rented for one to several months.
• Room rental: Involves renting individual rooms while sharing certain spaces.

>> Read more: What’s the Difference Between Short and Long Term Rentals? 

Questions to ask yourself before becoming a landlord

Before moving forward, consider whether you can afford unexpected expenses, manage tenant requests, and maintain the property. Also determine whether you have the time and resources to handle landlord responsibilities.

“Renting out your home isn’t a side project; it’s running a business with someone else living inside your biggest asset,” states Adam Willis, past-president of NARPM Utah and CEO of Nestwell Property Management in West Jordan. “The owners who succeed treat it that way from day one with clear systems, consistent standards, and good professional guidance. Check what you’re allowed to do, and be honest about your time and temperament. Will you answer a no-heat call at 2 a.m. in January? Are you comfortable enforcing a lease with someone you may like personally? If not, that’s a strong signal to work with a professional property manager.”

3. Build a financial game plan and set the rent

Setting a profitable rental price starts with understanding your expenses, evaluating local demand, and preparing for unexpected costs.

Estimate rental income and ownership expenses

Calculate expected monthly rent and compare it with expenses such as:

• Mortgage payments, property taxes, and insurance
• Maintenance, repairs, and utilities
• HOA fees and property management costs
• Potential licensing fees and other applicable expenses

Rental income isn’t the same as profit, so account for all ownership costs before making a decision.

Plan for vacancies, repairs, and reserves

“First time landlords often over-estimate the amount of rent they will receive and under-estimate the amount of time it will take to start earning income from rent payments,” cautions Hal Wilkerson, principal broker at Hawaii Coastal Property Management in Honolulu. “There are real costs that come with renting out your house. While it may be easy to say ‘Rent is $3,000 and my mortgage is $2,700, I should be fine!’ The reality is, especially in today’s competitive rental market, some markets are seeing compression on rents which can translate to either a rental property sitting longer than a first-time landlord may expect, or requiring them to reduce their marketed rent amount to induce a tenant.”

Even desirable rental properties can sit vacant between tenants. Set aside funds for missed rent, emergency repairs, and major replacements such as roofing or HVAC systems.

Understand the 50% rule

The 50% rule is a general guideline that suggests setting aside about half of your rental income for operating expenses, such as maintenance, insurance, and property taxes, not including mortgage payments. While it can be a helpful starting point for estimating costs, actual expenses will depend on your property, location, and maintenance needs.

Compare similar rental properties

Research comparable rentals based on location, square footage, bedrooms, bathrooms, amenities, and condition. Reviewing homes for rent on Redfin can help you understand local asking prices.

>> Rental Calculator: How Much Can I Rent My House For? 

Check rent control and rent increase rules 

Depending on where your property is located, there may be rules about how much you can charge for rent, when you can raise it, and how much notice you need to give tenants. Be sure to check your state and local rental laws before setting your price or making any changes.

4. Decide who will manage the property

One of the next things to consider is whether you want to manage the rental yourself or hire a property manager to help. The best choice depends on how much time you have, how involved you want to be, and what works for your budget. 

When self-management may work

Self-management may work for you if you live nearby, have time to respond to maintenance requests, and feel comfortable handling tenant communications and administrative responsibilities.

“Owning and managing single-family and multi-family homes can be an excellent way to build personal wealth,” shares Tony Jacobsen, president of Landlords of Iowa. “However, it is essential to educate yourself on state landlord-tenant laws, local regulations, and fair housing guidelines, as these vary by location. Joining a local landlord or property manager association is a great starting point to gain this knowledge.”

When to consider hiring a property manager

If you live far from your rental, own multiple properties, or simply don’t have the time to handle everything yourself, hiring a property manager might be worth considering. They can help with day-to-day tasks like finding and screening tenants, collecting rent, coordinating repairs, and handling lease renewals. Just keep in mind that services and fees vary, so it’s worth comparing your options to find what works best for you.

5. Get rental property insurance

Renting out your home may change your insurance needs, so review your coverage before tenants move in. Here are a couple of different types of insurance to consider: 

• Landlord insurance vs. homeowners insurance: Standard homeowners insurance may not adequately cover a tenant-occupied property. Landlord insurance may provide protection for the home, certain liability claims, and qualifying lost rental income, depending on the policy.
• Landlord insurance vs. renters insurance: Landlord insurance generally protects the property owner’s covered interests, while renters insurance, which is paid by the tenant, typically protects the tenants’ personal belongings and provides certain liability coverage.

6. Get your house rental-ready

Preparing your house for tenants involves completing necessary repairs, addressing safety concerns, and making the property clean and functional.

Clean, repair, and maintain the property

Before listing, consider:

• Deep-cleaning floors, kitchens, bathrooms, and appliances
• Fixing leaks, damaged fixtures, and malfunctioning systems
• Checking plumbing, electrical, heating, and cooling systems
• Maintaining landscaping and outdoor areas

Complete safety and security checks

Verify that required smoke and carbon monoxide alarms, locks, handrails, and other safety features meet applicable codes. Address known hazards and complete any required inspections.

Decide whether to rent furnished or unfurnished

Furnished rentals may appeal to tenants seeking flexible or short-term accommodations, while unfurnished properties can suit longer-term arrangements. Compare local demand, furnishing costs, and maintenance responsibilities.

7. Draft a lease agreement

A written lease establishes expectations between the landlord and tenant, including payment terms, responsibilities, and occupancy rules.

Include the essential lease terms

A rental agreement should generally address:

• Names of the parties and property address
• Lease duration and monthly rent
• Payment deadlines and permitted fees
• Security deposit terms
• Maintenance and repair responsibilities
• Renewal, termination, and notice provisions

Address deposits, pets, utilities, maintenance, and HOA rules

Clearly explain who pays utilities, handles routine maintenance, and follows applicable HOA requirements. Pet rent and security deposits must comply with relevant laws, including accommodation requirements for assistance animals.

Know when to have the lease reviewed

Consider consulting a qualified local attorney to ensure your lease complies with applicable landlord-tenant laws, required disclosures, and restrictions on lease provisions.

8. Market your house for rent

Effective rental marketing highlights the property’s features, provides accurate information, and helps prospective tenants determine whether it meets their needs. Here are a few ways you can draw interest to your property: 

• Write an objective listing description: Include the home’s size, layout, amenities, location, rental price, and applicable terms. 

• Use quality photos: Include well-lit photos of major rooms, outdoor areas, and distinctive features that make the property stand out.
• Explain property details: Provide accurate information about parking, appliances, utilities, and accessibility features where relevant.

• Set a consistent showing and application process: Establish a clear process for inquiries, tours, application submissions, and follow-ups. Apply the same procedures consistently and follow applicable notice and privacy requirements.

9. Screen applicants consistently

Finding the right tenant is an important part of renting out your house. Having a clear and consistent screening process can help you make informed decisions while following applicable rental laws.

Set clear screening criteria

Before reviewing applications, decide what qualifications you’re looking for in a tenant. This might include income, rental history, and other relevant factors. Make sure your criteria follow fair housing laws and are applied consistently to every applicant.

Review applications and verify information

Once applications start coming in, take time to review and verify the information provided. Depending on local laws and with the appropriate authorization, you may want to check:

• Credit history: Review credit reports to get a better understanding of an applicant’s financial history.
• Income and employment: Verify that applicants have a reliable source of income.
• Rental history: Contact previous landlords to learn more about their rental experience.
• Background information: Conduct any additional checks permitted under local laws.

Make a decision and notify applicants 

Once you’ve reviewed applications, use your established criteria to choose a tenant. Keep records of your decisions and communicate with applicants about their status.

If you deny an application or offer different terms based on information in a consumer report, the Fair Credit Reporting Act generally requires you to provide an adverse action notice. State and local laws may have additional requirements, so be sure to check the rules in your area.

10. Finalize the lease and prepare for move-in

“You want to make sure that you set up the tenancy correctly from day one,” urges Michael Denha, a Southfield, MI based attorney. “Landlords should use a clear and comprehensive lease, document the property’s condition prior to move-in and have the tenant sign a move-in checklist, as well as understand your state and municipality’s landlord-tenant laws. If a Certificate of Rental Compliance is required, make sure you get one. Taking these steps up front can prevent disputes, costly problems that could arise later, or costly litigation in the event an eviction is challenged.”

Once you’ve selected a tenant, complete the required paperwork, document payments, and prepare the property:

• Review and sign the lease: Go over the lease with your tenant, answer any questions, and make sure everyone signs and receives a copy.
• Collect the security deposit: Collect and document the deposit, following local rules for deposit limits, handling, and returns.
• Update locks and access codes: Change or rekey locks and update garage, gate, or smart-home access codes as needed, following local requirements.
• Complete a move-in inspection: Walk through the property, document its condition with photos and a checklist, and give your tenant a chance to note any existing damage.

11. Collect rent and manage the property

Once your tenant moves in, staying on top of rent payments, maintenance, and communication can help keep things running smoothly.

Set up a rent collection system

Choose a payment method that works for you and your tenant, whether that’s an online payment platform, bank transfer, or another option allowed in your area. Set clear due dates and keep records of payments and receipts.

Stay on top of maintenance and repairs

Make it easy for tenants to report maintenance issues and have a plan for handling routine repairs and emergencies. Keep track of requests, completed work, and expenses so nothing gets overlooked.

Keep communication open

Let tenants know how and when to reach you, especially for urgent issues. As the lease comes to an end, check in about renewals or any changes to rental terms, making sure to follow local notice requirements.

12. Know when and how to handle eviction issues

While no landlord wants to deal with eviction, it’s important to know what to do if problems come up. Eviction is a legal process that allows landlords to regain possession of a rental property, but there are specific rules and procedures you need to follow.

Understand when eviction may be necessary

Issues like unpaid rent or serious lease violations may be grounds for eviction, depending on local laws. However, not every disagreement or lease issue justifies eviction, so it’s important to understand your tenant’s rights and the rules in your area.

Get legal guidance before taking action

If you’re considering eviction, talk to a local attorney who understands landlord-tenant laws before moving forward. Avoid taking matters into your own hands by changing locks, shutting off utilities, or trying to remove a tenant without following the proper legal process.

>>Read more: What is an Unlawful Detainer? 

The bottom line

Renting out your house can be a great way to earn extra income, but there’s a lot to consider before getting started. Taking the time to understand your expenses, check local rental rules, prepare your home, and find the right tenant can help make the process go more smoothly.

Whether you’re renting out your home for a short time or planning to keep it as a long-term investment, a little preparation can go a long way. Just be sure to stay up to date on local requirements and reach out to a legal, insurance, or tax professional when needed.

FAQs about how to rent out your house

Is it profitable to rent out a home?

Renting out your home can be profitable, especially if your rental income covers your mortgage, maintenance, and other expenses. Just keep in mind that unexpected repairs, vacancies, and local market conditions can affect how much you actually earn.

How difficult is it to rent out your home?

Renting out your home doesn’t have to be complicated, but it does take some planning and ongoing work. Between finding tenants, keeping up with maintenance, and managing rent payments, there’s a lot to stay on top of. If you’d rather not handle everything yourself, hiring a property manager can help lighten the load.

Can I rent out my house if I still have a mortgage?

Yes, you can often rent out your house even if you’re still paying off your mortgage. However, some loans have rules about how long you need to live in the home or whether you need to notify your lender before renting it out. Be sure to review your mortgage agreement and check with your lender before making the switch.

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