How to Rent Out Your House (Step-by-Step Guide)

**Dave Meyer** (0:00)
Do you want to rent out your house and start producing passive income? If you do, you can go two different paths. The first path is what most people do. They don't want to sell their home, so they post a listing on Zillow, accept the first tenant they find, and forget about it until, of course, their property is trashed, they've lost money, and then they swear that they will never try real estate again. The second path, the path that I'm teaching you today, is when you do it the right way. You find great tenants, you get paid rent every month, like clockwork, and you control a property that can add hundreds of thousands of dollars to your net worth. And with just this one property, you can put yourself on the path to financial freedom. This is what I did 16 years ago. I had no experience, but I bought a property and needed to rent it out. Years later, that one property allowed me to buy a second, and then more, and then more. And today, I'm 38 and financially free.
In this episode, I'm sharing the tips I really wish someone had told me when I first got started. And I'm gonna walk you through the steps you need to take to rent out your house successfully so that you get wealthier instead of work.
All right, so here are the steps that you need to go through if you want to rent out your house and become a first time landlord. The first question you should ask yourself is, should I actually be renting out this house in the first place? Because a lot of people assume they can rent out their home and make a lot of money. And a lot of them are right, but some are just wrong.
Luckily, though, you don't have to guess. You can actually do the math and figure out if your home makes a good rental. The best way to do this is just to analyze it like it was a rental property that you were going out to buy.
And this is super simple. You can run your numbers through a rental property calculator, like the one that we have at BiggerPockets. You can check it out at biggerpockets.com/calculators and see if it cash flows. See if it will perform better than other things that you can do with your money. Because let's just imagine you're living in a home and trying to figure out whether you want to sell it or rent it out. There's probably a lot of money. You probably have equity trapped up in that house. So you need to decide, am I better keeping my money in this home and renting it out? Or should I sell it and put my money in the stock market, buy some bonds, buy some crypto? Whatever it is you would do as an alternative, you do need to weigh those two things against each other. So if it won't perform better than the alternative options, you should do those alternative options. You should sell and put your money elsewhere. But if it does perform as good or ideally better than those alternatives, then you should rent out your house. And I'll explain exactly how you do that in just a minute. But first, I kind of just help everyone do this analysis for themselves. Because the trick to this analysis is not the math. You can do that with the calculator. It will do all of the math for you. The thing you need to focus on and get right are your comparables. You need to understand what you can actually rent your property out for, because the number that you put into the calculator is super important. If you're just guessing that you can rent your house out for $2,000 a month, that's not good enough for this analysis, because you might find that you're not cash flowing down the line if you don't make that rent. So I want you to do something else instead. Go and find rent comps, rent comparables for your specific property. And this isn't hard. There are a couple of different ways that you can do it. The first is using some sort of automated system that uses an algorithm to pull your rents. We have a BiggerPockets Rent Estimator. There are other products out there that can do it as well.
Or the other two ways I recommend you doing this is one, asking a real estate agent. Make sure it's an investor-friendly agent because they'll understand rents more than just a run-of-the-mill real estate agent. Or ideally, ask a property manager. Call a property manager in the area, say, I'm thinking about renting out my home. What do you think this would rent for? Or talk to renters in your neighborhood and ask them what they are paying for rent. Getting a good estimate and accurate understanding of what your rents might be is the most important part of this analysis because it's going to help you decide definitively if you want to rent. And it will also help if you decide to go out and rent knowing what you can charge. It will make listing easier. It will help you understand the quality that your property needs to be in to get the best rents.