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

You might be planning to move out of your home, but not specifically to put it on the market. In this scenario, renting out your house could be an option. It doesn't just provide you with a more flexible living situation but also adds a source of income, which you can use to pay off your mortgage or cover additional bills. 

Having said that, it may sound easy to rent out your house; however, the reality might be different. Just as with any other rental property, this requires proper planning and preparedness to maximize your earnings and avoid unnecessary pitfalls. 

In this comprehensive guide, we'll walk you through the 16 most crucial steps that will clear all your doubts. So, let's get started.

How To Rent Out Your House For the First Time 

There might be many reasons to rent out a house, such as relocating, downsizing, or having extra money in their pocket. This sounds like a financially wise decision, but it requires a sorted and careful plan. 

From meeting legal obligations to finding trustworthy tenants and setting a fair price, many first-time landlords don't realize that renting out a house is much more than merely listing a property and collecting checks.  

Putting your home on the rental market is a huge responsibility. Irrespective of how many years of experience you have, you cannot take this lightly, as this is not just an investment property but your home, your safe place. Thus, you must look at a step-by-step breakdown of the entire process.

1. Decide if Renting Out Your House Is the Right Move 

First, it's important to know whether being a landlord is right for you before jumping in. Surely, renting out your house can fetch extra income and other long-term benefits, but it also takes time, energy, and a hands-on approach. In simple terms, you will have to weigh the pros & cons of renting out your house. Once you're sorted with all of this, it will be easier for you to keep the process streamlined. 

2. Understand Tenant-Landlord Laws 

When it comes to renting out your property, there are proper landlord-tenant laws and building and safety codes. Thus, you must get your hands on those things before hitting the ground. Usually, the rental laws cover things like how much security deposit you would want, the terms you want to put in the lease, and what to do if the tenant is unable to pay the rent. Whereas, building & safety codes ensure that properties are healthy and safe to stay in. 

In addition, you'll also have to understand the loan terms and whether any homeowners' association rules apply to your property. In such a scenario, it is important to review any restrictions on renting your house, such as limits or bans on short-term rentals. By knowing all these rules, you can protect yourself from falling into any legal trouble or anything like that.

3. Prepare Your Property for Rent

Before you list your property, ensure it is fully ready to rent. A clean, secure, and well-maintained house will attract more qualified applicants and increase your rental's price. Start by doing a thorough cleaning and repairing any visible problems, such as leaks, damaged fittings, damaged paint, or damaged locks.

Examine smoke detectors, carbon monoxide alarms, and electrical and plumbing systems to ensure everything meets safety standards. Simple changes like new paint or a new lighting system could boost appeal. Begin by taking crisp, high-quality photographs to make a great impression online.

4. Get Landlord Insurance

Before renting out your home, make sure your coverage includes landlord insurance. Unlike standard homeowners insurance, landlord insurance is specifically designed to protect rental properties and the unique risks that come with tenants.

Depending on your provider, you can add an endorsement for short-term rentals. However, if you plan to rent the property on a long-term basis, you'll typically need a dedicated landlord insurance policy.

Without proper coverage, you expose yourself to financial risk. Most landlord insurance policies include protection for property damage, liability claims, and potential loss of rental income if the property becomes uninhabitable due to a covered event.

5. Set the Right Rental Price

Setting the right rental price isn't just about breaking even; it's about making as much money as possible while still attracting renters. Market research shows that 80% of renters consider price the most important factor in choosing a place to live. Competitive rents can be found by looking at nearby properties and calculating the costs you have to cover each month. If you do the research and figure out your costs, you can set a fair, good rent price.

Additionally, you can set the rental price slightly higher, depending on factors such as location, property condition, and market demand. However, always remember that you have to keep the price at least enough to cover your expenses.

6. Advertise Your Property Effectively

If your property is now ready to be marketed, make sure you do it correctly. The rental description must clearly list the number of bathrooms, bedrooms, square footage, parking, amenities, pet policies, and neighborhood highlights. Create a concise and truthful description of the property that highlights its best features.

Make sure you use high-quality images and think about including a virtual tour. Posting your rental information on trusted rental platforms boosts your rental's visibility, lets you connect with more serious tenants faster, and reduces your time-to-fill.

7. Screen Tenants Thoroughly

Tenant screening is a crucial step in ensuring the tenants you keep are paying rent on time, properly following the lease terms, and taking care of your property. A tenant screening report can be a real game-changer, as it gives you easy access to a tenant's important & credible information. A tenant screening checklist includes credit history, references, employment & income, rental & eviction history, and criminal history. 

To save time, you can also use applications that generate screening reports and fully pipeline the process. Even though you will have to pay a certain amount, it will save you from the long-term financial and personal stress that tenants can cause.

8. Process Applications Quickly

The speed of your application is crucial in the rental market. The most qualified tenants typically submit applications to several properties. Therefore, delays can make it difficult to find a qualified applicant. Check applications immediately and confirm the income, employment, and references with no unnecessary wait.

Set clear approval criteria to ensure compliance with Fair Housing laws. Communicate your decisions clearly and effectively to ensure a seamless process.

9. Use a Lawyer-Approved Lease Agreement

Lease agreements legally outline the responsibilities of both the landlord and tenant. A state-specific or lawyer-approved lease will ensure conformity with local laws and safeguard your rights.

The lease should be clear about the rent amount, due date, late fees, terms for security deposits, maintenance obligations, and rules for the property. A clear agreement helps avoid confusion and offers legal assistance in the event of disputes.

10. Onboard Your New Tenants Properly

Once you've determined your first tenant, the next smart move is to onboard them to a property management platform. This is an important step, as it helps keep everything related to rental property in one place. With this, tenants can pay rent, submit maintenance tickets, and access the complete lease agreement online. Since you will need to complete this stage as a landlord, you may find it easier to keep track of rental revenue and expenses to prepare for tax season.

Additionally, a smooth onboarding process sets the tone for a professional, well-managed tenancy from the outset. Explain payment schedules, how to make maintenance requests, and how to use the platform with your tenants to channelize everything better. When everyone knows the process, confusion and delays are avoided, and a more perfect rental experience is guaranteed for both parties.

11. Decide How to Collect Rent

Making money from renting out your house is more than a side hustle; it's like running a small business. Just like any other business, you must keep this operation organized. One significant step toward creating a paper trail is asking your tenants to pay rent by check, bank draft, certified check, or other online payment methods.

Taking it a step further, it would be better if you provided receipts to your tenants. In certain countries and states, this pattern is rigorously followed, as it makes payment tracking easier and more streamlined for both the landlord and the tenant. This way, in case a payment question is raised at any time, you will have the proper paper trail to put your answer credibly. 

12. Implement a Maintenance Tracking System

Maintenance is a continuous responsibility, and having a system in place is crucial. Make use of a property management platform or a digital tool to keep track of repair requests, vendor information, and costs.

It is important to clearly define how tenants should make requests and what constitutes an emergency. Regular preventive maintenance reduces repair costs over time and protects the value of your property.

13. Set Communication Procedures

Clear landlord-tenant communication is crucial to maintaining a smooth relationship between both parties. If you establish clear expectations early on and stick to them, you'll avoid a lot of trouble and keep a positive relationship, whether you're managing the house yourself as a landlord or with a property manager.

By selecting preferred contact channels, such as phone calls, emails, or a special tenant site, you can further reinforce this process. In addition to avoiding misunderstandings, putting maintenance requests, approvals, and essential notices in writing also maintains a trustworthy record. Frequent check-ins, whether quarterly or biannually, can also improve openness, resolve minor issues before they become more serious, and strengthen a professional and courteous landlord-tenant relationship.

14. Determine the Lease Renewal Process

Landlords typically ask renters to notify them of their decision for lease renewal 60 to 90 days before the lease expires. If there is no notification from the tenant, the lease agreement remains month-to-month at the market rate. When the lease agreement is created, the tenants need to handle the lease renewal process in case of non-renewal.

By following this, things will be absolutely organized, and you will not fall into any traps or trouble. Having everything in hand will be rewarding for you as a landlord and the tenant down the road.

15. Build a Strong Landlord-Tenant Relationship

A professional and respectful relationship with tenants improves long-term success. When tenants feel heard and treated fairly, they are more likely to pay on time and care for the property.

Respond to communication promptly and enforce lease terms consistently. Strong relationships reduce turnover and create a more stable rental experience.

16. Prepare for Move-Out and Security Deposit Handling

The move-out process should be organized and transparent. Provide clear notice instructions and conduct a final inspection using your move-in checklist for comparison.

Document any damages beyond normal wear and tear and provide an itemized deduction statement if needed. Returning the security deposit within the legal timeframe protects you and maintains professionalism.

Pros Of Renting Out Your House! 

When it comes to putting your property on rent, there are certain evident benefits of renting out your house. It can benefit you both personally and financially, making it an ideal option for many homeowners. 

Passive Income Generation: 

One of the best advantages of renting out your house is the opportunity to earn without actively working for it. 

• Consistent Cash Inflow: Renting out your house provides you with a steady monthly income that you can use to pay off your mortgage, monthly bills, and other expenses. 
   
• Building Wealth: If you own a house in a good area where property rates are high, you can benefit from the rent as well as from selling your property at a higher price in the future.
   
• Tax Deductions: Property taxes, mortgage interest, insurance premiums, and maintenance expenses are among the many tax deductions available to owners of rental properties. By drastically lowering your rental's total taxable revenue, these deductions can increase its profitability.

Keep Property Ownership: 

Renting out your house can benefit you by allowing you to own a valuable asset and earn income from it. 

• Future Flexibility: Renting out your house gives you the flexibility to return to your property at any time in the future. Or else, you can also earn additional income while having your property in other areas.
   
• Shield Against Inflation: Rental income increases with inflation. This gives landlords the flexibility to adjust the rental prices. This way, the property can thrive against market conditions and doesn’t lose its value over time.
   
• Investment Leverage: With your rental property, you can refinance, take it out as a home equity loan, or use it as collateral for future investments. This may result in your wealth building. 

Learn Real Estate Management: 

Handling & managing your own rental property is a great way to learn the ins & outs of the real estate industry.

• Real Estate Profile Expansion: Managing rental income can be one of the best ways to expand your real estate portfolio substantially. Once you are well-versed in the basics, consider acquiring additional rental properties.
   
• Grasp Valuable Skills: Tenant relations, money management, and real estate market knowledge are just a few of the important skills that come with running a rental property. These abilities can be used for future real estate investments or even for starting a full-time real estate company.

Cons of Renting Out Your House! 

Renting out your house is undoubtedly a rewarding step; however, there are certain things and risks you should be aware of.

Time-Consuming

Managing a rental property would give you income, but it is a time-consuming task, especially when you are handling everything on your own. 

• Repairs & Maintenance: As a landlord, you'll be responsible for all repairs and maintenance. This can be extremely time-consuming when you have other important things to do.
   
• Tenant Management: Tenant screening, management, concern response, and lease agreement management would require significant time & effort. Many tasks, such as conducting property inspections, still require hands-on involvement despite the availability of property management software.

• Vacancy Dealing: It's not like you have to devote time and effort when you have tenants. If they leave, you will have to spend time showing the property to new potential renters as well. Vacancy periods can eat up your time and increase stress, especially for new landlords. 

Financial Risks 

As a landlord, you face many financial risks and the unwelcome burden of unexpected costs. 

• Property Damage Costs: Though most tenants treat the rental house as their own & live with care, not everyone is like that. You might have to face the risk of damage beyond normal wear and tear. It can be excruciating to spend money and time on urgent matters, such as plumbing issues.
   
• Disputes & Evictions Cost: Landlords must follow a strict eviction process, and even the smallest mistake could lead to legal problems. If a tenant defaults on rent or violates the lease terms, eviction can be a protracted, costly process that often requires legal assistance.
   
• Irregular Cash Flow: A vacancy could disrupt the steady flow of rental income you rely on. If your property is vacant for longer than expected, you will still be responsible for paying out-of-pocket for costs such as the mortgage, property taxes, and utilities.

Emotional Challenges: 

You’re wrong if you think that rental property management is only about finances & repairs. Sometimes, landlords get overwhelmed with emotions as well.

• Relationship Management Stress: Managing tenant relationships is a major challenge when disputes arise over rent payments, repairs, and lease terms. Balancing being a good landlord with saving on investment costs can be stressful at times.
   
• Work-Life Balance: For do-it-yourself landlords, the responsibilities of property management may not always align with their personal time. Managing time-sensitive problems, late-night tenant calls, and maintenance emergencies can make it difficult to sustain a healthy work-life balance.

Frequently Asked Questions

How much can I rent my house for?

Your rental price depends on local market demand, property condition, and comparable listings in your area.

Do I need permission from my lender to rent out my home?

In many cases, yes. Review your mortgage agreement before listing the property.

Is renting out your house worth it financially?

It can be highly profitable when managed properly and priced competitively.

How much should I charge for a security deposit?

Most landlords charge one month’s rent, but limits vary by state.

Simplify Your Rentals With TenantDen!

It doesn’t matter if you are renting out your house for the first time or just looking for a streamlined rental process; count on TenantDen for all your needs & requirements. With us, you can have a sorted alignment of every step of the process, from tenant screening to online rent collection,  to property management & more.

• Streamline the tenant screening process: Eviction, background checks, and more for a sorted view of potential tenants.
• Rent collection: Set up reminders and automate the whole process to collect rent on time every month, without any misses.
• Maintenance request tracking: Manage vendor information, keep tabs on repair needs, and interact with renters from a single, user-friendly dashboard.

List your property with TenantDen today and take your rental business and every aspect of it to the next level.