Long Term Rentals – Make Extra Money
Whether it’s a spare room in your home, multi generational suite, or an entire house, you can make money from it. If you need some help making ends meet or an extra source of income, perhaps becoming a landlord is the answer. In this article we’ll discuss how you can rent an unused space you own and make some extra money with long term rentals!
If you’re looking for more freedom with that space, or not wanting to commit just yet, check out our post on Short Term Rentals.
In this post, we will also discuss ways to get started with renting a space you own for long term rentals. We’ll also discuss some investments you can make to be sure your property is safe and stands out. You’ll also want to know how to protect yourself and your property with the proper insurance.
Renting properties you own can be a worthwhile investment, but you’ll want to do it correctly.
Let’s Get Started
Consider this list as you get started with the journey to renting a property long term.
- Do Market Research
- Consider Who You’re Advertising To
- To Furnish or Not
- Fair Housing Act
First, let’s look at the space you are considering renting. Browse Facebook Marketplace, Zillow, Apartments.com, and more. Get yourself a realistic idea of comparable prices. Those should be similar neighborhoods, yard sizes, and room/house sizes. Will there be covered parking available, what utilities are included? Are there amenities like a pool or nearby park/playground? Is it on a busy street or a property in the middle of 10 acres?
Don’t compare your property to something completely opposite and assume you’ll get the same. This works for both lowering and raising prices. You’ll also want to look for reasonable security deposit amounts, and fees like pets, parking spot, and pool key deposits.
I think move-in fees are stupid. I said it. Charging someone to move in to the property who’s sole purpose is to move into… sounds greedy to me. If you own a multi family property, send a notice to the other residents that someone new is moving in on whichever date. Stairs and elevators may be crowded, there may be a van or truck parked out front for unloading. Also be sure to let the new tenant know to be mindful of their new neighbors and once done unloading vehicles to move immediately to another spot. Or to not lock the elevator for an hour, unload whats inside and allow it to resume normal business.
Consider Who You’re Advertising To
For this I mean, are you going to market to a single person, family, college students, traveling nurses or professors (or other professions), or who? A property on a calm street next to a play ground will appeal to a family. Rooms for rent in a college town may be geared better towards college students or traveling professors. Are you near a hospital that hires traveling nurses? Is the property in a city with no yard, but plenty of jobs and public transportation?
While needed to note these features for costs, you’ll want to make a separate list of the similar features and who they’d best be suited to.
To Furnish Or Not
Will you provide any furniture? This can range from simple patio furniture to furnishing every room. Have you thought to rent to a professor hired to teach at a local university for one semester or a traveling nurse on a 4-6 month assignment? Is there a large construction project in your town that workers will be coming from out of the area to complete? Construction companies will reimburse the worker or pay the landlord directly to house its workers, and an apartment for one or a multi room house for many is cheaper than a hotel. It’s also more comfortable for the workers.
You’ll want to furnish the entire space.
Considering your rental to college students for a full school year? Perhaps a single room renter would benefit from furnishings while a group renting a house or apartment could split costs of furniture to furnish themselves. Maybe you provide dressers and a couch, or outside patio furniture. Or you provide nothing. But that must all be considered in the price of your rental.
Familiarize Yourself with the Fair Housing Act
The Fair Housing Act of 1968 prohibits discrimination by landlords to renters on the basis of race or color, religion, sex, national origin, familial status, or disability. So while above I mentioned about marketing your rental to a specific group, you can’t only rent to them. Housing is for everyone and should be available to everyone.
You should have background checks done and credit checks to ensure that you are renting to a safe individual who can afford to pay the agreed upon rent. But you absolutely cannot discriminate based on the above mentioned terms such as gender, race, disability, and more.
Consider Some Costs
There are some investments you may need to consider before your property is even seen.
- Touch up paint, fix any nicks in the walls or door frames. This goes for inside and out.
- Fix siding or roof panels that may be loose.
- Bring electrical up to code.
- Purchase new locks/keys.
- New furniture if you choose to furnish the property.
- New window coverings, be it blinds or curtains, or at least curtain rods mounted on the wall.
- New fencing and gates for privacy of the yard if the current option is cracking or falling.
- Printing costs for brochures or flyers to advertise the rental.
This is just a starter list of investments to make before listing your property for rent. You’ll be able to come up with other items to be attended to as you go.
Who To Hire
- Cleaning Company – you’ll want a top to bottom cleaning of the property, and to keep them on file for between renters.
- Local Photographer – you can find people to do this on Fiverr, to take amazing photos of the property and neighborhood if you don’t have the time or photo taking skills yourself. First impressions are important!
- HVAC – check to make sure everything is in working order with your plumbing/heating, and other electrical, including oil heaters and coal stoves.
- Handyman – have them fix any loose cabinets, doors, etc. But you’ll also want someone for when any minor fixes need to be made throughout the duration of the rental and in between tenants.
- Gardener- this is not only to make the property look nice for potential renters but to keep it looking nice throughout. This would be someone to cut and maintain the grass, tress, and plants rather than hoping the renter has an idea of what to do.
Marketing Your Space
You can go about this a few ways.
- Everyone you hired above, let them know when the property will be available for rent and to let their friends, family, and customers know about this upcoming rental.
- If you’re hiring a real estate agent to handle your rental/showings/background/credit checks, they’ll market for you everywhere they market other listings.
- Post on your own personal social media, Facebook Marketplace, Craigslist.
- Signage, put a large for rent sign in the yard, or on the door to an apartment, in the window.
- That flyer we mentioned above? See if you can post it at local businesses, universities, hospitals, drop off at construction companies. Try local professional sports venues. Many who work in the sports industry are transferred often by their team to different locations. They may be looking for a place to live for a season or part of a season.
- If marketing the property yourself and handling all rental provisions on your own, consider getting a free Google Voice phone number. Set the voicemail to change based on the property’s rental status.
If you get to the point where you own multiple properties, and you’re still handling everything yourself, or even with an agent, consider a website and social media accounts. Here you can feature open and upcoming properties. An email list for interested parties lets you inform them of upcoming listings. Post some virtual tours from inside the properties on stories or as reels. But this is further down the road.
You’ll want to run background and credit checks on your potential tenants.
First, have each interested party fill out an application. Use this template as is or as inspiration to help with creating your own.
On the application make sure to have a spot where they consent to background and credit checks and require an extra signature in this spot. Have each interested adult in the household fill out and sign this spot. So you may want to add extra sections for this on the back for each additional adult. This would also apply to college students who may have parents helping them with rent.
For running these checks, this article from Investopedia has all the information you need. They recommend sites based on what you are looking for out of that site. You may also have different sites available to you based on what state you are in.
You’re going to want to have the proper insurance policies for your property, as is your tenant. Some may vary by state or region so be sure to find out what locally works best for you.
Allstate has an amazing article on Landlord Insurance, what it covers and everything else you should know.
Rent A Space for Extra Money – Final Thoughts
This could be a great way to provide supplemental or full-time income if you go about it for the right reasons and with the right mindset. It could also be a great long-term investment for the financially savvy. Try to develop a good relationship with your tenant(s), be attentive, be kind, be available. Don’t let your property fall into disrepair. The housing market is a weird place right now.
As my moral suggestion, don’t charge people so much just because you can. If you are able to pay bills on the property without raising rent, please consider not doing so. Be kind to one another.
And with that, here’s some other ways you can make money with your home!