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Are you looking for an extra income source without getting a side hustle? If the thought of dedicating hours of your life to a second job sounds depressing, we don’t blame you. Burning out is the last thing you want and it’s likely to happen if you’re working extra hours away from the people and things you love.
Luckily, there are other options to earn extra cash without trading your precious free time for money.
Enter the sharing economy, a match made in millennial heaven. Make money renting out your stuff or extra space when you aren’t using it, no side hustle required.
Things you can rent for cold hard cash:
Rent Out Your House
With the advent of Airbnb, more people are renting their homes, or even their spare rooms. Airbnb, and similar services, have allowed the average homeowner to earn extra income through renting their primary homes, their vacation homes, their winter homes, and any other home they own.
This used to be solely for property management companies and real estate investors. Now, people like you and me are getting in on the act. According to Earnest, nearly half of all Airbnb hosts make at least $500 per month. How would you like to earn that kind of income by renting out your house?
If you want to earn money by renting out your home, then you won’t want to miss this ultimate guide to understanding what it will take.
How to Rent Out Your Home
While services like Airbnb provide a pathway to earning a nice income by renting rooms or houses you are not using, there are some basic things you should understand. We will walk you through the process.
Ready to get started?
Can I Rent Out My House?
You can rent your house out as long as you meet a few conditions: think lender and HOA approval. A quick phone call or two should square this away. Get their blessing and your ready to make some cash.
Here are the top benefits of renting out your home:
- Additional income to help pay the mortgage
- Extra money to cover home expenses
- Help build that emergency fund
- Grow your savings
- Help strengthen your investments and retirement
- Pay for vacation while you are traveling
- Provide some extra money for fun adventures
Can You Rent Out Your House If You Have a Mortgage?
To determine if you are able to rent out your home when you have a mortgage, look at your individual lending agreement. You should see a clause about whether or not you are able to use your home as a rental.
Do You Have to Tell Your Mortgage Company if You Rent Your House?
The best practice is to call your mortgage company and make sure you are allowed to use your property as a short-term rental. This will help you stay on the good side of your lender and avoid affecting your future borrowing capacity and the terms of your current agreement. It’s better to tell them upfront.
Can You Rent in an HOA?
The increasing popularity of short-term rentals is a rather new phenomenon, and many homeowner associations have yet to create rules specific to this situation. Others have established rules like if you want to rent out your home, then the minimum rental period is six months.
HOAs are typically run by community members and as a group are able to create, enact, and enforce rules that help in this mission (also known as Covenants, Conditions and Restrictions/CC&Rs). If you live in an HOA, you should have a copy of the document or you can request a copy. Review it to see if it is allowed.
What Does an HOA Look for When Renting?
If your HOA permits short-term rentals, that’s awesome! See what information they need from you, if any. This may vary. They might ask for a rental agreement or possibly nothing at all. They usually request specific dates for each rental period, contact information of renters, and an assurance you help enforce the community rules and regulations.
Can an HOA Stop Rentals?
Yes. Your HOA might already have a policy in place against short-term rentals. This is why it is a good idea to have a copy of the covenant and review the contents.
Can an HOA Ban Short-Term Rentals?
HOAs are governed by community members, so they have authority to enact rules and regulations that allow or prohibit certain activities within the community. These regulations can include banning short-term rentals.
If your HOA has banned rentals, and you would like to see the policy changed, then attend a meeting and be prepared to show how this can be a good thing for the community (not just you personally). It might be beneficial to speak to some of your neighbors, and if they agree with you, invite them to the meeting to show they support your proposal. If you are unable to change the policy as an outsider, you should consider joining the HOA board and working with other members to gain support.
Can an HOA Ban Airbnb?
Airbnb, a platform that helps find tenants for your short-term rental, can be banned if the covenant in your housing development prohibits them.
Should I Rent Out My House?
Is this income stream sounding better and better? If you’ve got the go-ahead from your HOA and lender, it’s all up to you now.
How Much Can I Rent My House Out for?
The choice is yours, seriously. How much do you want to make? Airbnb suggests searching comparable listings in your area to help you decide. Look at how your house stacks up and what bonuses you have to offer. Or, check out Airbnb’s rental forecast tool to see (on average) how much money you can start making.
Think about the extra special touches you can offer that will command a better rental rate, like:
- Parking, can renters use your garage or assigned parking space?
- Remodeled bathrooms (walk-in showers are safe and good for those with mobility issues)
- A remodeled kitchen
- Stocked pantry
- Entertainment options like premium streaming services, gaming consoles, or a well-stocked cupboard of family and adult party games.
Also See: How to Make $200 Fast
Do I Have to Pay Taxes When Renting Out My House?
There is a chance you might not have to pay taxes. Have you ever heard of the “Master’s exception?” Consider it the gift of all gifts from the IRS to you. In all its glory, the IRS allows you to rent your home for 14 days a year tax-free. Tax free! There is a catch: If you rent for more than 14 days a year, then you’ll be subject to federal taxes on the entire amount (be sure to consult your accountant).
Taxes vary by city and state, so check with your accountant or see if a local government official can point you in the right direction (like us, public officials cannot provide tax advice). Airbnb handles local taxes for select cities. While you’re creating your listing you’ll be able to check if your city is included in the service.
Where Can I Post My House for Rent?
With the advent of technology and mobile apps, there are numerous sites you can use to list your property. A few popular options include:
Rent Your House for Vacation
Ready to try it out? Now that you’ve decided to cash in on this opportunity you’ll just need to decide where to list your rental.
Rent House on Airbnb
Airbnb makes it easy to list your home. The site is user-friendly and geared toward helping you list your property as quickly and hassle-free as possible.
So, are you ready to become an Airbnb host? That’s their friendly term for you because you’ll be hosting guests at your property.
How to host in three simple steps:
- List your space
- Decide how you want to host (price, terms, etc..)
- Welcome your first guest
How Much Should I Charge for Rent?
If you list through Airbnb, they offer Smart Pricing which automatically updates your nightly price based on the season, demand, and other factors. Even before you sign up, they provide a handy tool (check out it out here) that allows you to estimate how much you could be making monthly.
Rent House by Owner
How would you like to make extra money while you travel for an extended time? Listing a house for rent by owner is easier than ever. Sites like Zillow allow you to have direct access to potential renters, no realtor required.
Rent House on Zillow
If you’re looking to pick up and leave your home for several months to a year or more, renting month-to-month on Zillow could be your solution. Unlike Airbnb, Zillow does not allow the advertising of vacation or short-term rentals; their focus is on long-term rental properties and real estate.
This might be the right choice if you’re thinking about living the RV life for a few months, or if you want to cash in on the earning potential of your primary residence while you move into a smaller place. The latter is a favorite strategy of the financial independence community.
How Much Should I Charge for Rent?
Zillow offers a convenient rental estimate tool that makes it easy to determine a good rental rate. Fill in some basic information on your home, and you’ll be able to browse similar listings so you can fine-tune your asking price. Follow the tool, and you’ll get a handy Rent Zestimate.
Rent Out A Room In Your House
Not planning on going anywhere, but still looking for a way to make money?
Maybe you just have a little extra space that is reserved for out-of-town visitors, hey mom and dad! But, what do you do with that guest room the rest of the year?
You might even be thinking about taking on a full-time roommate. How nice would it be to have someone help with the mortgage? House-hacking anyone?
How Do I Rent Out A Room In My House?
Renting out a room in your house is similar to renting out your entire home. The major difference is your personal space: You’ll be cohabitating with one or more people.
Can I Rent A Room In My House Legally?
Most of the time if your lender (or HOA) is good with you taking on a roommate, the government is, too. Be sure to check with local government officials regarding landlord-tenant laws.
How Much Can I Rent A Room Out For?
Several factors will determine how much you can rent a room out for. What do you have to offer? How much is a room going for in your neighborhood? Are you throwing in any extras? Use Airbnb’s money forecast tool to see how much you can in your specific area.
One Room for Rent Price
An easy way to estimate a rental price for your spare bedroom is to poke around on Craigslist or Airbnb and see what other people are posting. You’ll want to adjust up or down depending on things like utilities and how nice your place is.
Do I Have to Pay Taxes When Renting Out A Room?
According to TurboTax, you might have to pay taxes. If you rent a room out in your house for 14 days or less you are exempt from paying taxes on the income. Rent for over 14 days and everything, including the initial 2 weeks, must be reported on your federal taxes. Check your local tax laws to find out if you’re on the hook there as well.
When you book through sites like Airbnb, they will report your rental income to the IRS if you earn more than $20,000 or have 200+ transactions in a calendar year through their site.
Where Can I Post My Room for Rent?
Many sites allow you to post your spare room for a short or long term, like:
Rent Room on Airbnb
Renting out your spare room on Airbnb is similar to listing your entire house. In fact, you can post multiple listings for the same property. Airbnb hosts make a nice chunk of change, 38% make between $100 and $499 a month in extra income.
If you post multiple listings for the same property, make sure you link your booking calendars so you don’t run into double bookings.
Rent Out Your Car
Car-sharing companies are the new sparkly object, with the success of companies like Airbnb, the peer-to-peer sharing market is expanding.
If you only use your car for work or to run errands, then you have an income source just sitting in your driveway. How nice would it be to have other people paying you to use your car while it sits idle?
Can I Rent Out My Car?
Yes! Eager customers are waiting to rent your car. While sites that list your vehicle cover insurance to protect your property during rentals, you’ll want to check that you’ve got the go-ahead from your insurance carrier and lender.
How to Rent Out Your Car
In order to rent out your car, companies require proof of a few important details:
- Valid license and registration
- Provide vehicle make, model and year, VIN, and license plate number
- Meet eligibility and safety requirements
The driving records of renters are checked and anyone with a major accident or several traffic violations is unable to participate.
Getaround offers convenient hourly or daily car rentals for people in your city. You can earn hundreds of dollars a month sitting at home while your neighbors use your car for errands.
They offer keyless entry to rentals from a smart phone. Unlike s