How to rent out your house: 12 steps to success

The question of how to rent out your house might arise due to a move, financial reasons, or an emotional attachment to the property that keeps you from selling it.

The process can be daunting, though. There are legal elements to understand, tenants to screen, and home improvements to ensure your rental is competitive and attractive to applicants.

Don't let fear of the unknown stop you. There are tricks and tools available that make home rental a breeze.

Below, TurboTenant will take a deep dive into:

• Not only how to rent out your house but how to rent out your house effectively and efficiently
• How landlord-tenant laws can impact your rentals
• How to find, screen, and place tenants
• The pros and cons of property management
• The steps you can take if you want to learn how to rent out your house and not drive yourself crazy in the process

In this guide, we'll look at how to rent out your house in 12 easy steps.

Renting Out a House: Benefits and Drawbacks

Let's review some of the most common pros and cons that we hear from both first-time and veteran landlords, which can hopefully point you in the right direction for your own house rental experience.

Benefits of Renting Out a House

When you're determined to learn how to rent out your house, it can be tempting to focus on the positives initially—and there are plenty. Renting out property can be a fantastic source of passive income, helping you retain property over the long term and providing valuable insights into property management. As a result, you may feel confident using property management software to handle the tasks yourself rather than hiring a property manager.

Some of the benefits you'll experience when renting out your house include:

1. Maintained Ownership

There might come a time after purchasing a home that you'd like to move, can't afford to own two homes at once, and don't want to sell your property. Renting out your house means you can generate income to buy a new home without selling anything or giving up a great interest rate. 

This approach allows you to maintain flexibility while benefiting from the investment opportunities a rental property provides. Many landlords have realized that renting their house keeps more long-term options open and on the table.

2. Passive Income Creation

Renting out your home can generate extra income, which aids in covering property costs while contributing to long-term financial stability with minimal ongoing effort. After preparing your property and securing a tenant, the required attention significantly decreases, allowing you to focus on other interests or expand your property investment portfolio.

The workload lessens when you incorporate property management software into your workflow.

3. A Chance to Grow

While some skills are easy to learn from a book, learning property management is best done through hands-on experience. From handling tasks like tenant screening, financial accounting, maintenance and repairs, and lease management, you'll quickly receive a crash course in property management.

The experience you gain after managing your first property or two helps you move from asking yourself, "How do I rent out my house?" to "How many houses can I rent out?"

Drawbacks of Renting Out a House

While there are several clear benefits to learning how to rent out your house, it's also worth considering the other side of the coin. Becoming a landlord can be a time-consuming and expensive hobby, with tenants and personalities to manage, problems to solve, and expenses to consider.

1. Staying Current with Laws

One of the key components of renting out your house that we've already discussed is the existence of landlord-tenant laws. These laws can be tricky to navigate, and they're always changing, so ensuring you fully understand the federal, state, and local guidelines is paramount. There could be serious consequences for landlords who run afoul of these statutes, not to mention potential reputational or legal risks.

Since landlord-tenant laws can change from year to year, make sure you pay attention to what's happening in your property's area. Keeping your finger on the legal pulse is one of the most important aspects of managing property.

2. Creating More Work for Yourself

When you consider how to rent out your house, it's easy to forget how much time tasks can take from your day-to-day schedule. Finding leads, screening tenants, showing property, managing maintenance, and collecting rent can quickly pile up on your to-do list, and it might be hard to find enough time in the day. And if managing the property isn't your main gig, adding more to your plate could quickly become untenable.

If you're not ready for the time commitment it might take to launch your investment business, property management can quickly become a demanding and stressful experience.

3. Financial Challenges

The real estate market can sometimes be an adventure, with house prices fluctuating and interest rates constantly changing. Many landlords wonder how to rent out their house in times of financial uncertainty but there is never a clear answer.

However, while property ownership is generally a solid and reliable investment, unforeseen expenses and challenges can arise at the most inopportune times. Even with careful financial planning, there's no guarantee that renting out your house will be immediately profitable.

From external challenges, like weather and natural disasters, to other challenges, like tenants breaking a lease early and unexpectedly, new costs and expenses can pop up when you least expect it, causing high stress and financial burden.

12 Steps to Renting Out Your House

Renting out a house for the first time can be either a key first step into large-scale landlording or a small step into casual property management. Either way, understanding how to rent out your house begins with preparing yourself and your property to comply with local laws while creating an attractive package for renters.

Key steps include setting a competitive price, advertising to the market you want, screening and approving new tenants, lease signing, and arguably the most important part of renting out a house, collecting rent.

Now, let's dig into the details.

1. Learn the Relevant Laws

When wondering how to rent out your house, it's easy to skip over a crucial first step—understanding and complying with local, state, and federal landlord-tenant laws.

One of the most important laws to understand at the federal level is the Federal Fair Housing Act. This law aims to keep housing as fair as possible and requires landlords to avoid discrimination in advertising rentals or accepting tenants. This means landlords can't use criteria like race, sex, or religion to decide who to rent their property to.

All of this is to say that landlords must stay current on landlord-tenant laws.

2. Use Landlord Insurance

Landlord insurance protects against unexpected events like property damage or tenant disputes. Unlike standard homeowners or renters' insurance, landlord insurance specifically fits the needs of rental property owners, covering risks like property damage, liability claims, or loss of rental income in specific circumstances.

Landlord insurance comes in various types and can safeguard you from a number of challenges that may arise when renting out a house.

3. Set Your Rent

To successfully rent out your house, first ensure that your property is legally compliant and market-ready. The next step involves researching and establishing a competitive and profitable rental price.

The best way to determine a competitive rent price is to closely examine local listings similar to your property, assessing the features, amenities, and similarities/differences to determine where to set the price. It's important to also factor in the square footage and condition of the property to establish the proper benchmark.

Once you've done the legwork, find the amount that will cover your costs—things like mortgage payments, property taxes, insurance, and ongoing maintenance are necessary to factor in when setting the price. Striking the right balance between a competitive market rate and profit will go a long way toward setting you up for long-term prosperity.

4. Create a Compelling Listing

Crafting a compelling property listing with clear images and detailed information about the property will attract better tenants and more inquiries. Visually showcasing the property's highlights and best features is one of the best ways to show off your home.

Follow that up with a well-thought-out description of the property, using detailed and creative language to excite potential applicants and encourage them to apply. Don't be afraid to check out other listings to get a feel for the kind of descriptions that other landlords use and then enhance those for your own benefit.

Once you have a listing you like, post the ad to a listing service to start farming for leads. Ideally, you will post your ad on several platforms in order to maximize the listing's visibility.

5. Sort Through Applicants

The transition from "how to rent out your house" to "how to select the right tenant" isn't a straight line. Now that you (hopefully) have a pile of applications stemming from your listing, getting through the stack as quickly as possible can reduce the amount of time your home is vacant while ensuring you get the right candidate before they sign elsewhere.

Digital tools help speed up the review process, organizing information efficiently to increase efficiency and reduce the time it takes to pull everything together.

6. Screen Each Tenant

Screening tenants involves looking into the past to help guide the future. In a thorough report, you'll find credit, background, and eviction histories, as long as your area permits you to review this information. Detailed information provides peace of mind to landlords, who can feel more secure knowing they've selected the most qualified applicant. However, it's also essential to steer clear of discrimination during this process by consistently evaluating every tenant with the same criteria.

7. Create a Solid Lease

Once you've found the right tenant, a clear and concise lease agreement is your first line of defense against tenant disputes or conflicts. It's essential that a lawyer review your lease and that it follows all federal and local landlord-tenant laws to be legally compliant.

Since the lease is the defining document in renting out your house, you'll want to ensure that it includes key clauses about maintenance responsibilities and utilities, pet policies, late fees, and anything else that should be called out for your rental. The lease should avoid any prohibited clauses or language to prevent it from being declared void or unenforceable.

8. Move-In Time

The next step in learning how to rent out your house is actually renting out your house. You've selected an applicant, so now it's time to review and sign the lease, walk through the property with the tenant one last time, and then hand over the keys.

You can now explain your expectations for the new tenant and how you'll address their needs. Ideally, this is all captured in the lease agreement, which is a legally binding contract that aims to reduce miscommunication and put all parties on the right track.

9. Collect Rent Securely

One of the reasons many people want to learn how to rent out their house is for passive income. As such, rent collection is one of the most important aspects of renting out a house. You won't be in business for long without a solid rent collection process.

Regardless of how many homes you manage, directing all rent payments to an online collection system is one of the most convenient and secure ways to collect.

10. Use Maintenance Tracking Tools

Managing maintenance effectively is a good way to ensure your properties are ready to rent for the long term. Between ongoing, routine maintenance tasks and tenant requests, staying on top of repairs can keep costs down and tenants happy. A maintenance tracking system can help you stay organized and ensure that any issues are resolved promptly.

Ultimately, keeping rental units in good repair can quickly balloon costs, so a powerful maintenance tracker can help keep costs down while fixing problems as quickly as they arise.

11. Foster a Positive Relationship

The first thing you thought of when you were wondering how to rent out your house probably wasn't how to build trust with your tenants. But when you think about it, great communication and a positive relationship could mean the difference between filled and vacant units.

Start by being approachable and flexible with your tenants, answering questions, and promptly addressing repair requests. Make sure the lease is clear to everyone and maintain a positive presence when on the property. Good communication can prevent potential issues and foster a generally positive rental experience. Tenants who feel heard and listened to are more likely to stay on a property long-term instead of seeking other accommodations.

12. Streamline Renewals

Developing a proactive lease renewal process can help avoid vacancies, which could result in losing necessary income, and retain good tenants. To this end, it's incredibly important to ensure your tenants are aware of when their lease term is ending and provide them with adequate time to review any rent price increases, if necessary.

This process could become cumbersome depending on how many units are in your portfolio.

So, should you rent out your house?

You've waded into property management and learned the basics by asking how to rent out your house. But the ultimate decision to rent out property is up to you.

Consider your short—and long-term financial goals. Are you looking for steady income right now, or is renting out property a long-term investment strategy to build a larger portfolio? Are you prepared to take on the multitude of tasks that renting out property can add to your plate?

Finally, what are your plans for the future—not only for yourself but for your property? Is this property one you plan to live in yourself someday? Or have you decided not to occupy the home again but want to build on the investment you've already made in the house and focus on a long-term growth strategy?

Asking yourself these questions and taking the time to consider why or how to rent out your house can help you achieve success or avoid disaster.