Nine Steps to Turn Your Home into a Rental Property

Appfolio Websites • January 21, 2021

source:  Aparments.com / Jamia Kenan (author)


Many first-time landlords begin their careers in the real estate industry by transforming their homes into rental property. Perhaps you’re looking for an avenue to build wealth or you’re moving but not quite ready to let go of your abode. Whatever the reason, it’s important to know that there are some things you need to do before converting your primary residence into a rental property. Here are some steps to help you turn your home into a rental. 

1. Weigh the Pros and Cons 

Turning your home into a rental property is a big commitment. Realistically evaluate if owning rental property is something you can handle at the moment. Here are a few advantages and disadvantages to renting out your house. 

Pros

  • Owning rental property is a great way to build wealth and diversify or supplement your income 
  • The income you receive can help pay down your mortgage while also providing extra cash flow 
  • If your home has been on the market for a long time and you haven’t received an offer that allows you to break even, you can postpone selling the house 
  • Renting is a great option if you inherited a property, but don’t want to sell it or live there 
  • You could qualify for some tax deductions if you turn your home into a rental 

Cons

  • If you decide to manage the rental yourself, it can be very time consuming 
  • You’ll have to handle rental property expenses including real estate attorney fees, routine maintenance, landlord’s insurance, and more 
  • Since markets fluctuate, your rental property might produce less rental income than expected 
  • There are some risks like theft and vandalism if your rental stays vacant for too long 

2. Consider Waiting If You Have a Mortgage 

If you have a mortgage on your home, you generally need to live in the house for at least 12 months before converting the property into a rental. Read the contract for your loan and/or reach out to your lender to determine the waiting rules that apply to your loan. You don’t want to be accused of mortgage fraud, so it’s important to find out what rules are in place. 

If you say you’ll live in the home but are actually purchasing it as an investment property, it’s considered mortgage fraud. If a lender discovers a property owner has committed fraud, they could call the loan in which will likely lead to foreclosure. Once you’ve lived in the house for the required timeframe for your mortgage, you can begin turning your primary residence into a rental property. 

Although you might be eager to own rental property, owning a primary residence and converting it later has its advantages. Generally, homeowners can have a smaller down payment and lower interest rate when the mortgage loan is for a primary residence while rates for an investment property or vacation home might be higher. 

3. Find Out Whether You Can Get Another Mortgage 

If you’re moving out of your primary home and want to buy another one to live in, you need to find out if you’ll qualify for another mortgage before renting out your house. The bank could consider the rental income the property will generate for your new loan, but that’s not always the case. Call your mortgage lender and begin the conversation before moving forward. 

4. Check with Your Homeowners Association 

If your neighborhood is governed by a homeowners association, there might be some restrictions for renting your house out. Some HOAs don’t have any restrictions while others prohibit renting out houses completely. Some HOAs only allow a percentage or a certain number of homes in the neighborhood to be used as rentals. For example, if the HOA only allows eight houses to be rented out, you might be placed on a waiting list until a slot opens. Some neighborhoods will allow owners to rent out their house if the homeowners are experiencing financial hardship even if the community has reached its limit. You should also find out who is responsible for paying HOA fees each month. Since you agreed to follow HOA rules when you purchased the house, it’s important to revisit them to prevent being fined. 

5. Change Your Homeowners Insurance Policy 

Insurance policies for primary homes are very different than policies for rental properties, so it’s important to switch to a landlord’s policy. If you file a claim with your primary insurance after you convert to a rental, the insurer could deny your claim, causing you to pay out of pocket. Landlord insurance will not only protect you from damage made to the rental property such as a tree falling on the house, but it will also cover legal costs or medical bills if you’re found liable for your tenant’s injuries. Reach out to your insurance company as soon as you decide that you want to begin renting out your home. 

6. Learn About Tax Changes 

It’s recommended to consult an accountant to prepare for your rental property, but there are some basics you should know as a landlord. Your rental income will be taxable, so determine how your tax rate might change. However, once you convert the house to a rental property, you might qualify for tax deductions for rental property expenses including: 

  • Property taxes 
  • Mortgage interest 
  • Repairs and renovations 
  • HOA fees 
  • Landlord insurance policy 
  • Utilities (if you pay for them) 

Reach out to your local municipality or tax advisor and ask about the homestead exemption you probably have on your house. You are only allowed to have the homestead exemption on your primary residence, so find out the next steps if you want to convert your home into a rental. 

7. Get Your Property Ready 

In order to attract renters and set a competitive rent price, you’ll probably need to invest in upgrading your house to increase curb appeal. You don’t have to complete a home makeover all at once. Start by creating a list of the improvements you envision and complete the renovations over time. For example, the rental property might be located in a warm climate so investing in a pool may be worth it, but it’s a luxury amenity that can be put on hold. Low-cost upgrades like adding a fresh coat of paint and some landscaping are a great place to start. Installing a small fountain or mirrors can go a long way as well. Along with renovations, begin making any necessary repairs. Everything in the house should be in working order including appliances, plumbing, and the HVAC system. 

8. Secure the Required Permits 

It’s common for municipalities to require a permit for residential properties that operate as rentals for safety reasons. These types of permits usually aren’t expensive, but a necessary step in many areas. Typically, an inspector from the local government will inspect the property for any potential health and safety hazards. For example, the inspector might check electrical, heating, and adequate exits. The inspector will give the landlord a report listing any necessary changes or repairs that need to be made before the property is compliant. Permit requirements vary depending on the location, so reach out to your local city hall to find out if you need one. 

9. Learn How to Be a Landlord 

Once you decide you want to convert your home into a rental property, begin researching how to become a landlord and how to rent out your house. Research how to handle basic landlord tasks like screening tenants, collecting rent, and completing maintenance requests. You’ll also need to learn how to plan for rental property expenses. If you don’t have the time to manage the property yourself or you want some help as a first-time landlord, you’ll probably want to hire a professional property manager. 

Similar to having an accountant, consulting with an attorney is recommended, but you should have a general understanding of certain laws. Learn about federal and state landlord-tenant laws, along with fair housing laws. You don’t want to violate a tenant’s rights or discriminate against potential tenants, so familiarizing yourself with these laws is essential. As a novice landlord, you’re bound to make mistakes (we all do), so educating yourself will help avoid negative situations and increase your profit. 

 

Owning rental property can help set you up for financial success but converting your home into a rental and becoming a landlord can be intimidating at first. However, with some patience, research, and communication with the appropriate professionals, it’s certainly doable. Apartments.com Rental Tools can help you manage landlord tasks and our blog is filled with articles to answer any of your questions. Embrace the journey and good luck! 


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The Price You Set Can Make (or Break) Your Sale

By KCM • March 1, 2026
The Price You Set Can Make (or Break) Your Sale There’s one decision you're going to make when you sell that determines whether your house sells quickly, or it sits. Whether buyers make an offer, or scroll past it. Whether you walk away with the maximum return, or you end up cutting the price later. And that’s your asking price . The #1 Mistake Sellers Make Today: Trusting the Wrong Number If you’re thinking of moving and trying to figure out what your house may sell for, it’s tempting to start with an online home value tool. They’re fast, free, and easy. And you don’t have to talk to anyone. But here’s the problem: they don’t know your house. And that can be a bigger drawback than you realize. Where Online Estimates Fall Short Online tools often lag behind the market. They look in the rearview mirror, relying on closed sales and delayed information. And in that sense, they’re using incomplete data . That’s not a miss in how these systems are built. Some information just isn’t available online. Bankrate explains: “ While these tools can be a useful starting point, keep in mind that they typically do not provide the most accurate pricing. Algorithms can only rely on the information available; they can’t account for things like a home’s condition or renovations made since the last public information was updated.” They can’t see: The unique features that make your house special All the work you’ve put in to keep it in good condition Or, how in-demand your specific neighborhood is right now So, while they may do a good job in some cases, they can’t be as accurate as a local agent who has boots on the ground day in and day out. In a market where buyers have more options, a seemingly small margin of error can cost you thousands if you price too low, or weeks of lost momentum and time if you price too high. If you want to sell for the most money and in the least amount of time, you don’t want the fast answer on how to price your house. You want the right one. That’s why the savviest homeowners today don’t rely on algorithms when it actually matters. They rely on people, specifically trusted local agents. What an Expert Agent Brings to the Table According to 1000WATT , sellers overwhelmingly believe real estate agents have the best sense of a home’s true value, far more than any automated tools. That confidence isn’t accidental. As Bankrate puts it: “A professional appraiser or real estate agent can visit the home in person, assess the neighborhood as a whole as well as the individual property, perform more thorough market research, and consider subjective details.” And those details matter. A skilled local agent doesn’t just pull reports. They know what’s happening right now: What buyers are paying this month, not last month, or even last year How your home compares to the current competition in your neighborhood Which features add value based on what buyers are willing to pay for today How to price your house to create urgency in this market And once an agent steps foot in your house, they may even find your online estimate undershot your value. So, if you stuck with the estimate you got online, you’d actually be leaving money on the table. And no one wants that. Bottom Line While online tools can give you a rough starting point, only a local expert can give you a price that actually works. If you want to know the right number for your house, not just the easiest one to find, let’s talk.

The Real Reason Home Sales Slowed in January. And It’s Not What You Think.

By KCM • February 27, 2026
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Top 2026 Housing Markets for Buyers and Sellers

By KCM • February 25, 2026
Top 2026 Housing Markets for Buyers and Sellers W ho doesn’t love a top 10 list? Well, here are two top 10 lists for the housing market this year. But before you take a look, there’s something you should know. If a move is on your radar for 2026, here’s the most important thing you need to understand upfront: there isn’t one housing market this year – there are many. Experts agree 2026 is shaping up to be one of the most geographically split housing markets in years. Some areas are tilting in favor of sellers, while others are opening real doors for buyers. Who has the advantage depends almost entirely on where you are. Selma Hepp, Chief Economist at Cotality, puts it this way: “ Looking ahead to 2026, regional differences will remain pronounced, with demand favoring areas that offer both economic opportunity and relative affordability.” To show just how divided the landscape is, here’s a look at where sellers are expected to have the upper hand, and where first-time buyers may finally find their opening this year. Where Sellers Are Poised To Win Big in 2026 Zillow identified the following metros as some of the strongest seller markets for 2026, based on buyer demand , pricing momentum, and how quickly homes are expected to sell: In markets like these, buyers are going to be competing for limited inventory, which gives sellers more leverage. Homeowners in seller’s markets this year can expect: Stronger buyer interest Shorter time on market Better odds of selling close to (or above) asking price That doesn’t mean every listing is guaranteed success. But it does mean sellers who prepare well and lean on an agent’s expertise should be very happy with their results in 2026. Markets Where There’s More Opportunity for First-Time Buyers On the flip side, here’s a look at where buyers have the power – in particular, first-time buyers , since they’ve had the hardest time breaking into the market lately. Realtor.com highlights the top metros where first-time buyers are expected to have better opportunities in 2026: These markets stand out for a mix of: More affordable home prices Better housing availability Strong local amenities and economic health For first-time buyers, that combination matters. It’s what could finally turn “someday” into “this could actually work.” In buyer’s markets, they should expect: Less intense competition More room to negotiate A clearer path to getting an offer accepted What Matters More Than Any Top 10 List Not seeing your city on the list? Don’t stress. This is just a national snapshot, not a judgment on your local market. The goal here is just to show you how different the market really is depending on where you are. And remember, you can buy or sell no matter how your local market leans. You just need an agent’s help to figure out the right strategy to get it done. For example: A seller in a more buyer-friendly metro may need to be aggressive on their price and prep. A buyer in a seller-leaning area may still need to come prepared with their best offer. To find out where your market falls and what you should expect, you’ll want the help of a local expert. Bottom Line The housing market in 2026 isn’t one-size-fits-all. It’s a year where local conditions matter more than ever. Whether your market leans more buyer-friendly or seller-friendly, the right strategy can put you in a strong position. And that’s where a local expert comes in. Let’s connect.
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