For many real estate investors, renting out their investment properties is a great way to make money in real estate in the form of rental income. For this reason, many property owners are constantly asking the question “How to rent out a house”? What is the easiest and fastest way to rent out your property? The process is not as hard as people might make it seem. Continue reading this blog to find out exactly how to rent out a house step by step.
Step #1: Establish rental value
Determine comparable rents
Of course, every real estate investor wants to know how to rent out a house as quickly as possible and for as much money as possible. That is why your first step is establishing a rental value for your property. This is done by comparing your property to similar ones for rent in your area. These “comparables” or real estate comps allow you to establish your property’s rental potential.
To help you easily find real estate comps, you need to perform a real estate market analysis (comparative market analysis). Mashvisor has all the necessary real estate investment tools that will help you conduct a real estate market analysis in a matter of minutes.
Related: How to Perform a Real Estate Market Analysis
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Make improvements to add value
When real estate investors begin thinking about how to rent out a house, they first think about all the fixing and repairs that need to be done. They suffer from the thought of repairing their rental property because it can be very costly. However, if you focus on repairs and improvements that will bring your rental property in line with its “comps,” then you can potentially add great value to your property and raise your rental rate.
Weigh the costs and benefits of renting your house
Before jumping into making improvements and renovation to the rental property, you need to make a realistic estimation of your likely rental income. Weigh out the costs and benefits of renting out your house and ask yourself if it will generate a profit and produce a positive cash flow.
Step #2: Spread the word
List your property where people look
Where and how you advertise your rental property is very crucial when you’re wondering how to rent out a house to tenants. You need to list your rental property where people look. With the ongoing use of technology and social media websites, it is only right to list your rental property online. There are various real estate investing websites that will advertise your property and bring your tenants.
You can also advertise your rental property in the newspaper or even put up signs to lure tenants to your property. Think strategically about what group of tenants you are targeting. Are you aiming to attract millennials, college students, families, or seniors? Each group has its own special way of marketing that you need to understand before putting your rental property out there. If you market your rental property incorrectly, you can be staring at a vacant property and miss out on a high return on investment.
Read Also: How to Market Your Rental Property for Sale: Tips and Strategies
Think outside the box and be creative when spreading the word about your rental property. Use the right language and the right techniques. If you plan on putting up a sign, then make it stand out. If you plan on advertising your rental property online, then be descriptive and accurate. How to rent out a house successfully first begins with a smart marketing strategy. That is why getting creative when advertising your rental property will really pay off.
Step #3: Find the right tenants
Don’t take chances
Every real estate investor wants their rental property to always have a high occupancy rate. That is why so many property owners choose the first tenant that comes along without thinking wisely about how this tenant will affect their rental property. No matter how eager you are to rent out your house, always remember that having no tenant is better than having a bad tenant.
To avoid falling into this commonly made mistake, scan your tenants carefully. Perform a background search of each tenant to see how their previous renting experiences were. Asking a couple questions is not enough when screening tenants. Always go back and verify all the information they provide for you. The last thing you want is to fall into the never-ending headache of a tenant not paying rent!
Related: Tenant Screening Process: Red Flags Landlords Should Not Ignore
Obey the law
Even though you want to carefully select your tenants, this does not mean that you should be discriminatory. The last thing you need to be facing while trying to rent out your house is a federal discrimination complaint. It is your responsibility as a landlord to know and obey all applicable fair housing laws.
How to rent out a house: What you need to know before
1. Do you want to live near your rental property?
Living close to your rental property allows you to check on it occasionally. That is, of course, after giving your tenants proper notice. In addition, living close to your rental property allows you to take care of repairs yourself and show the property when it’s time to list it for rent again.
If you live in an area that is not considered as the best place to invest in, you can still buy rental property and hire a professional property management company to look after your property.
Are you in search for the best places to invest in? Mashvisor can help you out. We have all the necessary real estate investment tools like our property finder tool, which will make your property search as easy as one, two, and three.
Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!
2. Know landlord-tenant law
Most states have specific landlord-tenant laws that cover issues such as security deposits, level of access to the property, and how much notice you need to give your tenants when you want them to leave. There are also laws concerning the eviction process and how it should be done. It’s important that you fully understand the laws in your area to ensure that you aren’t breaking any.
3. Make sure that the rent is paid on time
This seems like an obvious point, but so many property owners get too friendly with their tenants that they might let them slide a couple of weeks. This is definitely something you want to strictly control if you’re wondering how to rent out a house! You need to make sure that you can enforce that the rent is paid on time and that your tenants know that there is zero tolerance to whoever fails to pay their rent.
When you have a tenant not paying rent, this can drastically affect your overall return on investment and cash on cash return for your rental property. Many real estate investors use their rental income to pay off debt or mortgage payments. So not being able to collect rent on time will cause you to pay from your own pocket.
4. Customize the lease
You need to customize your lease to fit your situation. For example, if you choose to allow pets, specify how many, what kind/breed is permitted, and any rules that apply. You could include specific rules like dogs should be on a leash when outside the fenced-in yard and specify the consequences when a pet becomes a constant annoyance to the neighbors. When you make yourself clear to tenants, you will save yourself from a lot of problems in the future.
5. Inspect the property often
Inspecting your property regularly is a must if you’re asking yourself how to rent out a house. This is something that many landlords tend to ignore and when it comes time to bring in a new tenant, they are surprised to find that their property is in a bad condition. To avoid this, take pictures of your property and conduct an inspection every three months.
A final word
Being a landlord is not an easy job and knowing exactly how to rent out a house can take some time and experience. It all begins with first gaining the right amount of knowledge and familiarizing yourself with every aspect concerning the topic. Check out Mashvisor’s Knowledge Center for various blogs about renting out your property and much more!