“How to Turn Your First Home into a Rental Property”

Buying your first home is a huge milestone — but what happens when you’re ready to move and don’t want to sell? Turning your first home into a rental property can be a smart way to build long-term wealth, generate passive income, and take advantage of a strong rental market. Here’s how to do it right.

1. Evaluate Your Home’s Rental Potential

Start by researching local rental rates for similar homes in your area. Compare your property’s location, size, and condition to nearby listings. The goal is to determine whether the potential rent can cover your mortgage, taxes, insurance, and maintenance — while still leaving room for profit.

Pro tip: A local real estate agent can help you perform a rental market analysis (RMA) to get an accurate estimate of what tenants are willing to pay.

2. Check Your Mortgage and HOA Rules

Before listing your home, make sure your loan and community rules allow rentals. Some mortgage agreements and homeowners associations (HOAs) restrict leasing for a certain period or limit the number of rental units in the neighborhood.Call your lender and HOA to clarify any restrictions early in the process.

3. Calculate the Financials

Turning your home into a rental changes your financial picture. You’ll need to budget for:

• Property management fees (if you won’t handle it yourself)

• Repairs and maintenance

• Vacancy periods between tenants

• Insurance upgrades for rental coverage

• Property taxes, which may increase for investment properties

Run the numbers to ensure your rental income exceeds your new expenses — even with a safety margin.

4. Update Your Insurance Policy

Your standard homeowner’s insurance doesn’t cover tenant-related damages. Switch to a landlord insurance policy, which protects your structure, covers liability, and may include loss-of-rent coverage if your home becomes temporarily uninhabitable.

5. Get the Property Rent-Ready

First impressions matter. Tidy up the yard, apply a fresh coat of paint, and handle minor repairs before showing your home.Modern touches like updated lighting, new hardware, or energy-efficient appliances can also help you attract better tenants and justify higher rent.

6. Decide How You’ll Manage It

You have two options:

• Self-manage: You’ll handle marketing, tenant screening, rent collection, and maintenance yourself.

• Hire a property manager: A professional will take care of everything for a fee (usually around 8–12% of monthly rent).

If you’re moving out of the area or have a busy schedule, a management company might be the smarter choice.

7. Screen Tenants Carefully

A thorough tenant screening process helps prevent costly problems later. Check credit history, employment, references, and prior rental records.Always comply with local fair housing laws when evaluating applicants.

8. Know Your Legal Responsibilities

Landlord-tenant laws vary by state and city. Make sure you understand:

• Lease agreement requirements

• Security deposit limits and rules

• Maintenance obligations

• Eviction procedures

Consulting a real estate attorney or property manager can save you major headaches.

9. Treat It Like a Business

Becoming a landlord is more than collecting rent — it’s running a business. Keep detailed records of expenses, repairs, and communication.And remember: Consistent, professional management helps retain good tenants and protect your investment’s value over time.

Final Thoughts

Turning your first home into a rental can be one of the most rewarding financial decisions you make — but it requires planning, organization, and the right mindset. With guidance from a knowledgeable real estate professional, you can turn your property into a profitable long-term asset that works for you.