Renting out a house can be an excellent opportunity to earn passive income. However, new homeowners do face the challenge of not knowing how much they can rent their house for. Worry not! Here’s what you need to know.
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Is it worth using a real estate agent?
Before we look at the things to consider when pricing a house to rent, it might be in your best interest to note that you have two options when looking to rent out your house. You can rent it out yourself or employ the help of a real estate agent.
Of course, without the help of a real estate agent, renting out your house might prove challenging and demanding. You may need to carry out a lot of research and understand the requirements and responsibilities around renting a house. However, you can naturally save a lot of money by arranging to rent your house yourself.
How do I work out how much to rent my house for?
Step 1: Determine the current market value of your house
Hiring professional home valuation services may be the best way to go about this. They ensure you get an accurate value.
Free home valuation services and online calculators may be available, but they might not be as accurate. These services may also come with strings attached. For example, the company performing the valuation might require that you hire them to help you rent out your house.
Step 2: Look for a reliable online rent calculator
An online rent calculator gives you a rough estimate of how much rent to charge. A good example is the OpenRent online rent calculator. You will be required to fill in details like:
- The address of the house
- The current market value of your house
- Nearby amenities (schools, transport links and shops)
- The number of bathrooms and bedrooms
- The availability of parking
- Whether the house is furnished or unfurnished
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Step 3: Check what other landlords are charging for similar properties
You can obtain this information from property websites such as Rightmove and Zoopla and local ads for houses to rent. Ensure that the properties you use in your comparison tick the boxes for the details mentioned in step two.
By analysing the information, you are more than likely to get a rental value that is just right (not under or overvalued).
Is it worth it to rent out my house?
The short answer is yes. It can be a prudent way to earn passive income. However, not all homeowners are in the same situation. There may be circumstances in which it is better to sell a house than rent it out.
Can I rent out my house if I have a mortgage?
This depends on the terms of your mortgage. Some mortgage lenders allow it, especially if you are on a buy-to-rent mortgage, but others don’t.
Renting out your house when your mortgage clearly outlines you shouldn’t is mortgage fraud. There are hefty consequences for this.
Since it is not uncommon to encounter situations that might require you to rent out your home, always seek consent from your mortgage lender.
