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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Is AI the New “Well-Meaning Dad” for Real Estate Buyers and Sellers?

By The Inner Circle • March 31, 2026
People are turning to AI for just about anything you can think of: Trying to figure out if a strange symptom is worth a doctor’s visit Drafting a text they’ve been overthinking for three days Deciding whether that noise coming from their car is “normal” or “you should probably pull over immediately” Even asking how to handle awkward conversations, negotiate a salary, or plan out major life decisions So of course, it makes sense that people buying or selling a home would turn to AI at different stages of the process. And to be fair, it can be incredibly useful. It can give you a general sense of how the process works, help you understand terminology, and prepare you to ask better questions. Ideally, it helps make things smoother. More efficient. More informed. But that really hinges on whether it’s actually giving you accurate information, and whether that information is being interpreted correctly. That’s not to say that AI always gives wrong or even bad advice. But one thing it always gives is…confident advice. And sometimes, that confidence can be misplaced. When Everyone’s AI Answer Is “Right”… Things Can Go Wrong A recent story making the rounds is a perfect example of how this can play out in real life. According to NewsNation , well-known celebrity agent Ryan Serhant shared how a major deal nearly fell apart because both sides were turning to AI for guidance during negotiations. Basically, the seller asked if they were accepting too low of an offer, and AI confidently said yes. On the other hand, the buyer asked if they were paying too much. And, wouldn’t you know it, they were confidently told that they were in fact overpaying. That led to both sides wanting to cancel the contract. The agents involved were able to step in, help their respective clients understand the market data, and ultimately bring the parties back together to salvage the deal. And that’s becoming a more common role in today’s market. Agents are having to help people navigate situations where the challenge isn’t a lack of information… but rather being too certain about the information they are receiving. Very Few People Actually Trust AI, Yet Many Still Follow Its Advice A recent survey found that while only 16% of people say they trust AI “a great deal,” yet many still rely on its answers when making decisions. Even more interesting: 58% of people admit AI has influenced their opinions 32% don’t fully understand how it generates answers And despite all of these things, many people still rely on the confident-sounding answer from AI over a trusted, verified source That’s a tricky combination. Because if you don’t fully understand how something works, it becomes very hard to recognize when it might be wrong. And when the answer is delivered in a way that sounds authoritative, it’s easy to accept it at face value. AI Is the New Dad in the Room In a way, none of this is entirely new. Real estate agents have been navigating this dynamic for years, it just typically comes from different sources. For instance: The well-meaning buyer’s dad at the home inspection. A relative who “sold a lot of houses” in their life. (It was two. And they were in the 80s and 90s.) Their hair stylist who knows every house on the market in town. That’s just to name a few examples. There are plenty of other people with thoughts and opinions they want to share with someone who is in the middle of buying or selling a home. And, while they come in all shapes and sizes, the one thing they all have in common is that they are absolutely, 100% confident in the advice they give. Unfortunately, their perspective and advice is often wrong or outdated, which puts the agent in a tough spot because they have to gently untangle advice that sounds logical, but isn’t actually good advice. People are often speculating how many jobs AI will replace in the near future. Will it replace the well-meaning friend or family member soliciting advice to home buyers and sellers? Probably not. Most likely AI will just be added to the list of outside advice agents have to help their clients assess and decide whether it’s accurate or not. And that’s really what this all comes down to. By all means, use AI. Ask it questions. Get a feel for things. Explore different angles. And while you’re at it, hear out the thoughts and advice of friends, family, and even that random person who sounds incredibly confident in what they’re saying. There’s nothing wrong with gathering input. But at the end of the day, just make sure you have an agent you trust helping you weigh the confident-sounding advice… so you can make a confident decision of your own. The Takeaway: More and more people are turning to AI for advice, and when it comes to buying or selling a home, that’s no exception. It can be a helpful starting point, giving you a general understanding of the process and helping you feel more prepared. The challenge is that AI often delivers confident answers that can sound right… even when they don’t fully apply. That’s why having a trusted agent matters. Not just to provide information, but to help you interpret what you’re hearing from AI (or even a well-meaning friend or relative), filter out what doesn’t apply, and guide you toward decisions that actually work in your specific situation.

If Your House Isn’t Getting Offers, Read This.

By KCM • March 30, 2026
If Your House Isn’t Getting Offers, Read This. Online searches for “can’t sell house” just hit an all-time high according to Google Trends . So, if your house has been sitting on the market without any bites, you’re not the only one. But it's also not the end of the road. Homes are selling every day, so you can turn this around. You just need to take another look at your approach. If you’re feeling this pain, know this: an online search engine isn’t where you should go for your answers. It’s much better to talk to your agent. Because a search engine doesn’t know your market or your house. But your agent does. While a quick search or an AI platform may give you some tips on what to try, only an expert agent can actually diagnosis what’s going on – and how to fix it. For example, your agent knows most homes that struggle to sell today are usually being held back by one (or more) of these three things. 1. Presentation: Buyers Will Compare Everything When inventory was tight a few years ago, buyers overlooked imperfections because they had to, or they’d lose out to another bidder. Now? That’s no longer the case. Today’s buyers scroll through dozens of listings in just minutes. They compare condition, updates, lighting, finishes, layout, and more – all side by side. If your home feels dated, cluttered, or in need of repairs, buyers will notice and it’ll knock your house right off their list of contenders. This doesn’t mean you need a full renovation. But it does mean first impressions matter again. To compete today, you need curb appeal. Clean spaces. Neutral colors. Professional photos. If there are scuffs on the walls, obvious repairs, or too many outdated features, it could be what’s holding you back. 2. Pricing: If the Price Isn’t Compelling, It’s Not Selling This is maybe the hardest one to hear, but what your neighbor sold their house for a few years ago isn’t necessarily the same price you’ll get today. As Selma Hepp, Chief Economist at Cotality, says : “For sellers, the days of pricing aggressively and expecting instant offers are largely over. Homes that are well-priced and well-presented will still sell, but pricing discipline matters more than it did during boom years .” Buyers are budget-conscious right now. If your home is priced based on outdated expectations instead of current demand, buyers may still look at your house online… but they likely won’t write an offer. Or, they’ll make an offer that you think is too low. Pricing too high for this market is one of the top things sellers miss the mark on today. And those who aren’t willing to meet the market where it is or entertain offers may feel stuck. 3. Access: If Buyers Can’t See It, They Can’t Buy It It sounds obvious but limited showing availability can kill your momentum. If your house isn’t easy to see because you’re restricting showings to evenings only, no weekends, or requiring a 24-hour notice, you're cutting your buyer pool down by more than you may realize. And the more friction you create, the fewer buyers walk through the door. In a market where buyers have more options, the last thing you want to do is give them a reason to skip your house. Availability matters because if no one sees it, no one buys it. Don’t Let Search Results Decide Your Next Step When your house isn’t selling, it’s tempting to spiral and wonder if it’s the market or if something’s wrong with your house. But instead of searching for answers online, here's what to do. Sit down with your agent and ask three honest questions: What are buyers looking for in today’s market? What feedback are we getting from showings? Why do you think my house hasn’t sold yet? That conversation will bring a lot more clarity than any search engine results. Bottom Line If your listing feels stuck, it’s not a sign you shouldn’t sell. It’s the market giving you feedback. And feedback is powerful when you use it. Start with a real conversation with a real agent about what’s working and what’s not. Your agent will be able to tell you which small adjustments could totally change the momentum. Because in this market, the sellers who adapt are the ones who move.

Your Home May Be Part of the Great Wealth Transfer — But It Could Be Costly for Your Heirs

By Inner Circle (The Lighter side of Real Estate) • March 26, 2026
The oldest living generation today is often described as sitting on a tremendous amount of wealth. Much of it has been built slowly over decades, and a large portion of it is tied up in real estate — homes where decades of life took place — paid down slowly, maintained carefully, and held onto for years. Lately, there’s been a lot of talk about how that wealth will eventually be passed on to younger generations, and how it could dramatically change their lives. Some of the headlines make it sound as though heirs are simply waiting in the wings, ready to receive an inheritance and turn it into luxury purchases, second homes, or dramatic lifestyle upgrades. It can create the impression that the next generation is counting the days until they receive the wealth that took a lifetime to build, and the ways that it will be quickly spent. But in reality, that picture doesn’t reflect what many families actually experience. For many heirs, the wealth they inherit doesn’t arrive as money at all. It is often in the form of a home. And it usually takes time, effort, coordination, and decisions that aren’t simple to make, especially during an already emotional period before the house provides them with any form of money to spend on their own. Inheriting a Home Can Actually Be a Financial Burden When someone inherits a home, they haven’t inherited cash that can be used right away. They’ve inherited a property that comes with responsibilities, decisions, and ongoing costs. Even before anything can be sold, there are practical realities to manage. Property taxes still come due. Insurance needs to remain in place. Utilities, upkeep, and sometimes association fees don’t stop when they inherit the property. And if the home sits vacant, those expenses can actually increase, not decrease. There are often administrative steps to work through as well. Settling an estate, navigating probate timelines, coordinating paperwork, or addressing title issues can take longer than people expect or can easily manage. When multiple heirs are involved, decisions can become more complex, even when everyone has good intentions. All of this means there is often a long stretch between inheriting a home and being able to access any financial benefit from it. In fact, that in-between period can be especially challenging because it may also require them to spend their own time and money in order to maintain the property, at a moment when they are already dealing with loss and transition. The Money May Be Helpful… Just Not Life-Changing The phrase “generational wealth” can create unrealistic expectations. While some heirs do inherit properties worth millions, many inherit homes with far more modest equity — especially once mortgages, liens, repairs, and selling costs are factored in. For a lot of families, the proceeds from selling an inherited home won’t fund a luxury purchase or dramatically alter their lifestyle. Instead, it may: Pay down lingering debt Rebuild savings that were stretched thin Cover education expenses Serve as a long-awaited down payment on a home of their own Provide a financial buffer during uncertain times All of that is meaningful. But for most heirs, their inheritance is more about stability than it is an immediate path to a high-end lifestyle often imagined when people hear “generational wealth.” It Might Be Difficult to Talk About, But It’s Worth It Talking about what will happen to a home after someone passes can feel morbid, premature, or even unnecessary. Many homeowners plan to live in their home for the rest of their lives, and updating it or thinking about the future may not feel necessary. So if this isn’t an easy topic to bring up, that’s completely understandable. But avoiding the conversation doesn’t make the responsibilities disappear. It simply passes them along to your heirs, who must navigate decisions, logistics, and costs while also coping with loss. Thoughtful planning doesn’t have to mean selling early or making major changes. Often, it’s as simple as understanding the home’s condition, keeping records organized, knowing its likely market value, or having a clear sense of what will need to be done — and by whom — when the time comes. As difficult as it might be, the most meaningful thing you can do for yourself and your heirs is to start open conversations now and discuss how the house will eventually be handled. The Takeaway: Headlines about the “great generational wealth transfer” often make it sound like an entire generation is about to become extremely wealthy and start buying luxury real estate. Some heirs may use their inheritance that way. But for most, the reality is far less glamorous. Much of the inherited wealth comes in the form of real estate — homes that need upkeep, management, and careful decisions before any financial benefit can be realized. Proceeds from selling an inherited home can be meaningful (paying down debt, rebuilding savings, or helping with a down payment), but they rarely become a life-changing windfall. For most heirs, it’s about stability, not luxury. Open conversations and thoughtful planning now can help ensure that when the time comes, an inheritance provides support instead of unexpected financial or emotional stress.
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