So you want to know how to rent out a house.
You’ve already decided that you want to rent instead of sell your house, and you’re considering doing it yourself instead of having a property management company handle everything and take a cut of the rental profit.
There are a number of ways that you can get started renting out your house, but this step by step guide will give you the a detailed process that will get your house rented out fast!
Here is the layout for this guide-
- Make sure your house is rent ready
- Research and Decide Rent Price
- Create a solid lease agreement
- Take Awesome Photos
- Write up Details
- Post your listing to multiple free websites
- Screen Tenants
- Sign the deal
- Move-In Inspection
- Collect Rent!
- (Optional) Landlord Insurance and Registering as an LLC
Let’s jump right into it!
if you’re going to rent out a house, make sure it’s ready First!
I am sure you have taken good care of your house. That does not mean it is ready to be rented yet however.
The very first step is to make sure that you fix all minor issues. Your tenant will want a home that is ready to move in. As soon as they sign the lease and hand the deposit over, they should be able to move in right away.
There is no need to go overboard with making a house ready for rent. Just make sure everything works. A fresh coat of paint on the walls is relatively cheap and really improves the appearance of a rental house. Patch cracks in the walls before you paint.
You can consider other small things like switching out light switches and outlet covers. Definitely replace towel bars and toilet paper holders if they are rusted or worn out. You should also replace blinds if they are damaged. These small issues can make your rental appear in much worse condition than it really is.
A rental owner can also consider renovations to maximize rental revenue, but you need to be careful with this step. It makes sense to replace carpet with holes and tears. Just make sure to budget according to how much rent you are going to charge each month. Buy nice but affordable carpet that matches the rent income you will receive.
There are other options to improve the quality of your rental unit, but that goes into renovation details that are too much to list in this article. Just make sure that everything is clean and functional, and you should be able to rent out your house with minimal difficulty.
Research and Decide Rent Price
This step can be confusing for Rental Owner beginners. It’s actually much easier to do than it used to be. Just hop online and look what other renters are charging for similar rentals.
There are several factors to consider when comparing your property with others.
- Square Footage- Generally the bigger it is, the more you can charge.
- Kitchen Quality- A nice kitchen is a huge selling point for a rental. Your tenants will pay a little extra if it has qualities that make it stand out.
- Location- Make sure to keep in mind your properties location when comparing prices. A house downtown in a major city can rent for higher than a suburb that is farther from the action.
- Bedroom Count- More bedrooms equals more rent. Just remember, in many states the basement bedroom will not count unless it has an egress window. It is a fire hazard to not have a window to climb out of.
- Other upgrades- Tile or Composite flooring can mean more rent every month, but again be careful doing renovations specifically to charge more rent.
Using all of these factors, you can get a pretty accurate figure for finding how much rent to charge. When in doubt, start by advertising rent on the high side of your estimate. If it hasn’t had much interest after a couple weeks, the market is letting you know the price is too high. Lower it by $50-$100 and try again.
Create a Solid Lease Agreement
This is hands down the most important part of how to rent your house. A lease agreement is your first line of defense if there are issues with the tenant.
There are many things you can include in your lease. You will specify the rent amount, the due date of rent, the responsibilities of the tenant, and many more things. Other things you could add are a non smoking clause, specifying if you allow pets, and lawn care and snow removal.
I am not a lawyer and this is not legal advice, just suggestions based on my own experiences. It would be very wise to contact a legal representative to help you with creating your lease. There are lawyers that handle building these contracts all the time, and they can help you build a great lease agreement. A lawyer will also be able to add any extra stipulations you would like to have in your contract. This way you can tailor your lease to include everything you’d like.
One of my favorite tips to give rental owners… Allow pets!
You might be worried about damage, which is understandable. But here is what I would suggest. You can stipulate in your lease agreement that an extra “pet rent” is to be paid every month for each animal. You can also require an extra pet deposit per each animal. All of these combined can net a considerable amount extra per year, and should cover the cost of replacing carpet and flooring if needed. You will also be able to charge the tenant when they move out for any extra damages that exceed the deposit.
Your tenants might be having trouble finding a place that allows pets. This is a win-win for both parties. Provide them a place for their pet and maximize your rental revenue.
Take Awesome Photos of the house you want to rent out
Alright, so your unit is looking tip top and you have a lease just waiting to be signed by a potential renter. Now comes the fun part!
Pictures are definitely the most important part of advertising your house for rent. Think about it. The very first thing you see on an advertisement is almost always the picture. It’s best to use a high end camera, but you can use your smart phone in a pinch!
The first picture you should list when advertising a house for rent is usually the front of the house. Make absolutely sure that its a bright and sunny day outside when taking this picture. Clouds in the picture make everything look duller. It might even be necessary to wait until the weather cooperates. It is definitely worth it to wait to take the picture.
Stand out in the street and get the entire house in the picture. The front door should usually be positioned in the center. The nicest pictures have a bit of sky showing in the background, so make sure to stand back far enough.
You can also include a picture from the backyard if there is something that stands apart. Try to highlight the best features. A nice looking fence or garden beds can be a selling point if you have them. If it is a simple backyard with just grass, there is no need to show this in a picture. Skip the backyard pics and let the tenant see it in person when you show the unit.
You will want to take a picture of the kitchen, the bathrooms, the bedrooms, and the basement rooms if available. I would recommend at minimum 6 pictures of the unit, but on most platforms you can list up to 20. Pictures give more information for the potential renter than anything you write. Give them as much information as possible from your photos.
Open the blinds and let in as much light as you can. Natural sunlight in pictures always looks best. Make sure to avoid glare from the sun in the lens.
Sometimes natural light just isn’t possible. In this case, close the blinds and turn on every light you can. Stand in the corner of each room to get as much into the frame as possible. This not only shows more of the room to the tenant, it also makes the rooms look bigger. It is nice if the rooms are furnished for the pictures, but not necessary.
You can also use a photo editor to really make your pictures look perfect. This isn’t necessary, but can really help sharpen up things and make your photos look brighter.
Write up details of your house for rent
Great! Your pictures look awesome! 🙂 Now you will build your rental listing.
Advertising is an essential key to rent out your home fast. Without good advertising, your rental property can sit vacant. Vacancies really eat away at your profits as a rental owner.
Here is a broad overview of how to make a listing:
- List bedrooms/bathrooms
- Show Square Footage
- Use exciting language
- Describe key features
- Mention places the house is close to in your town
- Keep it short but Interesting
- Save listing in a doc file to copy and paste to multiple sites
- Include a way to contact you
We are in the process of creating a paid course to show you how to build the perfect rental listing and rent out your house as fast as possible. You can find out exactly how I built my listings to rent out over 200 apartments and homes in 1 year!
Post Your Listing to Multiple Free House rental Websites
Now that you have your pictures and your details written out, you are ready to start posting your advertisements. One of the best things about renting out your house in 2020 is the number of sites you can list your home for free!
There are many tricks to making your advertisement unique and noticeable. Try and look at other advertisements on these sites and copy what you like.
Our Paid Course Will Teach You Everything About Marketing
If you want a detailed step by step process for how to build the perfect listing on all of these websites, we are including that in our paid course! The paid course also includes our #1 strategy for marketing homes and apartments- Social Media. Using social media to my advantage was responsible for over half of my success at leasing apartments.
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This is crucial. You do not want to rent your home out to a person who will trash the place. You will not be able to pick the perfect tenant every time, but you can minimize your risk.
There are rules you will need to follow when screening your tenants. Rental discrimination laws can prevent you from screening on certain characteristics. Make sure you know the specific laws for your state.
Things you can screen tenants for
Income Level: Can they afford rent every month? You should require that they bring a months worth of pay stubs to prove they make at least 3x the amount of rent you are asking.
Credit Score: As a landlord you are allowed to obtain their credit score when evaluating if you want them as a tenant. While this is not mandatory, it really helps to make sure that your tenant pays what they owe.
Criminal Background: It can be difficult for people who have made bad decisions in their past to find a place to rent. You can decline a potential renter based off of their criminal background, but keep in mind that people deserve second chances sometimes. Make sure to know your local law.
Things you cannot screen tenants for:
Gender, Race, or Sexual orientation. This is fairly common sense and 99% of owners would not discriminate based off of these characteristics, but you should know that you can be sued if you deny housing based off of these things.
Have a detailed plan for choosing what criteria qualifies a renter and stick to it. There can be problems if you deny one person but not another for the same reason.
For example, let’s say you denied a renter based off of a 500 credit score, but allow another renter with the same score to rent from you. It could be possible to be sued over discrimination.
Just keep a consistent criteria for screening your tenants and you will be just fine.
Sign the Deal:
Congratulations! After all of your efforts, you’ve found the renter that meets your qualifications.
Now it’s time to sign the deal. You should require a maintenance deposit at the signing. This is where you would collect that payment and the first months rent. If they move in during the middle of a month, you can pro-rate the rent due for that month.
Once they’ve signed the lease and paid the deposit/s, it’s almost time to hand them the keys!
Move In Inspection:
This is the final step before handing your tenants the keys. You will walk through the entire unit or house with your tenant and mark down any damages or blemishes your unit has. After you have done the walk through, you will have them sign the form saying that the property should be returned in the exact same condition it was received.
This is a very important step. By having the tenant sign this sheet, you have proof that your unit was in good condition before it was rented out. If the tenant causes damage and refuses to pay for it, this sheet can be shown in court stating that there was no damage prior to the tenant moving in. This has saved countless property owners from absorbing the costs of tenants damaging their property.
Finally, we’ve reached the best part. You’ve found a responsible tenant and can sit back and collect your check every month.
(Optional) Landlord Insurance and Registering as an LLC
Neither of the above steps are required by law, but it is good to be aware of these options when renting out your home.
Landlord Insurance can protect you from a number of issues. For a small example, if a natural disaster strikes your rental home it can cover additional expenses like posting up your tenant in a place while repairs are done.
It is not required by law to have landlord insurance, but there are several benefits to having it. One of the downsides is the cost can eat into rental profits, but at the same time it can protect you if disaster strikes. We will cover in depth the pro’s and con’s of landlord insurance in another article.
Registering your rental property as an LLC
An LLC is also not required by law, but can protect your personal assets on the rare chance something can go wrong. Registering your rental home in an LLC is an option you can consider. An in depth article covering LLC’s for rental properties is coming soon.
Side note: If you register your property as an LLC, you will need to change your lease agreement to show this.
Now you know all the steps of how to rent out your house! Hopefully this guide was helpful in helping you decide if you want to rent out your house or not.
There are a few options available to you if you do not want to rent out your house yourself.
Hire a Property Management Company: A Property Management Company can save you time, but will cost you money. Weigh the Pro’s and Con’s with the help of this guide-
Sell Your House: Maybe you are considering selling your property instead. This can be a big payday initially, but you are leaving long term profits on the table. Check out our full guide below.