How to Successfully Rent Your House: A Step-by-Step Guide

Whether you’re considering becoming a landlord because you have some extra space, because you want passive income from a duplex, or because you just don’t want to deal with selling your old house quite yet, real estate may look like a sound investment to you. Before you take the plunge, it’s important to educate yourself about the process and how it works. Here’s a step-by-step guide on how to rent your house.

At its simplest, you put your money down on a place, rent it out, and collect a monthly check. But experienced investors will tell you that there’s a lot more to becoming successful as a landlord in real estate.

Coleen Dearing completes 31% more sales than the average agent in Santa Fe, New Mexico. Much of her business consists of investors buying properties to rent until they retire.

“Owning rental property is a business, and it has to be approached as a business investment,” she says. “You have to have the right personality to do it; it’s not for people who are not risk-tolerant.”

Step 1: Assess your situation

Before deciding to jump into renting, assess your potential rental situation.

If you have a spare bedroom, maybe you’re thinking of listing it on Airbnb or finding a roommate. This could lead to a loss of privacy if you have to share a kitchen or bathroom. The short-term renter or roommate could have different standards of cleanliness and appropriate noise levels, or they might come and go at odd hours. Before attempting this route, be honest about your tolerance levels when living with strangers.

In a duplex or multifamily unit, you’ll have more privacy, but you’ll still share some spaces. Your bedroom wall may be next to a tenant’s loud television, or they could park on your side of the driveway. Buying a rental home entirely separate from your living situation is the most expensive (but often the least annoying) option for landlords.

If you already own the house you’re planning on renting, you’ll want to make sure your mortgage loan and insurance are set up for a non-owner-occupant to live in the house — and change them if they aren’t.

Next, consider what type of rental you want the property to be. Short-term, or long-term? Whether you’re renting a room or a property can influence this decision … along with the amount of cash you’ll need to start as an investor.

Maybe you just want to rent out the spare bedroom in your house or list your vacation home on Vrbo to make some extra money. Or, maybe you own a separate property and are more interested in a long-term rental agreement. Each comes with its pros and cons.

Short-term rental pros

You’ll have the freedom to use the property when you want.
With occasional occupants, the property won’t experience as much wear and tear.
Seasonality and current market demand can be factored into your nightly rental rate.

Short-term rental cons

You’ll have to clean the property more often than if it was occupied by a long-term renter.
If you live in a touristy area, it may be tough to find renters in the off-season.
Competition can be steep. You’re not only competing against nearby hotels and resorts but also other rentals in the area. What gives your property an edge?

Long-term rental pros

You’ll have a consistent second source of income (as long as the property is rented).
The responsibilities of the utilities are passed on to the renters. So, no utility payments for you!
You can partner with a professional property manager who will handle things like screening potential renters, adhering to rental laws, and handling home repairs and maintenance.

Long-term rental cons

Having the property continually occupied is going to lead to more wear and tear on the home and its appliances.
You could find yourself bound to a long-term contract with a less-than-ideal tenant.
You’ll lose out on using the property as a vacation home.