Buying a house is a huge financial investment. People save money and often pay hefty EMIs to buy that dream house. However, the same house can help you earn money. If you have an empty house or a lot of space in your first house that you want to rent, it can generate a good sum at the end of every month. Over time, you can recover the money you spent buying the house.
The average rent in the USA can be $1,702 per 897 sq. ft. You can measure your house and get an idea of how much you can earn from the rent. This article explains how you can make money by renting your house to others.
Guide to Rent Your House and Earn Money
Follow this guide to set up your house as a rental property and enjoy the benefits!
1. Set up the House for Renting
The first step is to have your own house. If you already have, set it up for tenants. Check if everything in the house works properly. There should be electricity, water, heating, air conditioning, etc. Get repairing and retouching done if needed. Now, think whether you want to offer a furnished, semi-furnished, or not-furnished house. If the house comes furnished, see if all the amenities and appliances work perfectly. The house should also be aesthetically pleasing. You can buy some affordable art or decor pieces.
2. Calculate the Operating Cost
There are multiple operating expenses associated with a house that you need to bear monthly and annually. Make a list of all small and big expenses. Calculate the total amount. You can also consider the cost of advertising the house, insurance, tax, mortgage payments, etc. When you set the rent, it should cover said operational charges and leave you with good profits.
3. Decide on a Competitive Rent
Thinking, how much to charge for rent? Deciding on the rent can depend on many factors. You first need to consider the property. The better the house’s condition, the higher the rent can go. A furnished house will have a higher rent than a not-furnished one. The location of the house matters. Good connectivity is another virtue. You should further consider the operational costs. Remember that you also must offer a competitive cost. If someone else has a similar rental at a lower price, your house may be lying empty for longer.
4. List House for Rent
Once everything is sorted, list your house for rent. Make sure to click some nice high-resolution pictures of all the available space from different angles. A potential tenant will see the images you provide before visiting the house. The pictures are hence important. Also, give accurate details while listing the house. Note that overselling the property will damage your and your house’s reputation.
5. Find Reliable Tenants
Many might be interested in your house, but finding a reliable tenant is crucial to ensure timely payment of rent and security of your property. A background check of a probable tenant is recommended.
6. Try to Retain the Tenants
When a tenant moves out, you must set up your place again before the next tenant. It means you have another round of repairing and retouching. You will need a new lease, too. All this is time and money-consuming. So, if you find a reliable tenant, try to make it a long stay. You can do your part by being polite and helpful to your tenants. Leave a welcome note or flowers for the tenants when they move in. If they call with any issues or ask for any information, help them.
7. Use a Landlord Software
Landlord software will allow you to advertise your property, screen tenants, access lease agreements, collect rent, and so on. Do some research and get suitable software for you. You can add the software’s fees or charges to your operational cost.
8. Get the Correct Insurance
A tenant may not give rent. There can be damage to the property. Many such incidents can happen. Proper insurance will cover such expenses. Standard homeowner insurance will not cover expenses incurred during renting a property. Get a bed and breakfast insurance policy for renting a primary residence and a landlord insurance policy for renting a second home. Your insurance provider can guide you through the details.
9. Hire a Property Manager
Hiring a property manager is not compulsory but recommended if you do not have the time or simply don’t want to try to find tenants, do regular maintenance, take care of repairings, etc. A skilled property manager will manage everything as you sit back and earn money. You must pay the property manager’s salary, but you can set your rent after considering the salary and other operational costs.
Some people rent their houses for extra money, and some list their houses because they are not using them. In any case, renting can be a good idea. The demand for rental property in the USA is high, so renting can be profitable. While your tenants will want a comfortable home, you must also ensure they take good care of the property. You can visit the property to see if everything is okay, but not frequently, as it can interfere with the tenant’s comfort.