How Much Money Can I Make From Renting My Home?

Clearview Property Management owner Nia Reczek is a second-generation realtor from Indiana. Now living in North Carolina, she helps homeowners find tenants to rent their properties. In this article, Reczek tells us how much money the typical homeowner can expect to make from renting his home.

The amount of money you can expect to make from renting your home really depends on how much the home is worth and how much of a mortgage payment you are making to the bank each month.

If you have lived in the house for a long time, or if you were able to buy it for a great price and score a great deal, then you have a better chance of making more money from the rental on a monthly basis, in terms of the profit margin between the rental amount and the monthly mortgage costs.

Here in Fayetteville, North Carolina, we work with a lot of investors who are constantly buying properties here in our local area. The reason for this is because Fayetteville is actually the No. 1 market in the United States right now for real estate purchases. The government can guarantee that a house that you buy here today will be worth more in two years, and you can’t get that type of guarantee anywhere else in the country right now.

Because of that, and because of our thriving real estate market and reasonable prices, we have a lot of real estate investors coming here to Fayetteville to buy rental properties. In most cases, the investors I work with are buying at a low price, doing some rehab or renovation work to the home, and then renting them out for a profit. Most of the time, the majority of those investors will make twice of what their mortgage is on that house by renting it out to tenants.

I have a few rental properties myself, and I make about a third more than what my mortgages are on my homes. But as always, the amount that you can expect to make in excess of your mortgage payment each month really depends upon how you bought the house for. If you buy it right and you pay a good price, then you are going to be able to make enough income off of the home to cover your costs and make a profit.

Here in North Carolina, we have a lot of military couples who will come in and buy a home and then they will get P.C.S. (Permanent Change of Station) somewhere else in the country. And of course, if they do not have enough equity in their house yet to sell it, then they have to come up with a Plan B. So oftentimes these military couples will end up renting their home for a few years until that equity builds. Or, in other cases they might end up coming back to the base, since people in the military are frequently required to move back and forth between bases.

So a couple might want to hang on to the house they just bought for a few years, because they know they are going to come back to Fort Bragg here in town eventually. And normally, when we rent out their home, we are able to get a price that can cover their rent, our costs, and maybe even get them $100 in addition each month that they can put away for any home repairs they might need in the future.

Ideally, we want to be able to look at what the homeowner’s mortgage is and find a tenant who can pay enough rent to cover that plus our 10% fee each month. Our goal is always for the homeowner to at least break even when renting out their home, if not make a little extra money, as well.

One thing in particular that strikes some people as strange about the Fayetteville area is that people with homes can expect to have more success turning their residence into a rental than people with apartments or condos. Although we do have a few apartments and condos that we rent out, oddly enough here in Fayetteville most people prefer to live in single-family dwelling homes. Most of our tenants are military couples, and they might have a small child. So they want a yard for the kid to play in, making single-family homes the best thing to have if you’re an investor looking for a property to rent out.