Price it against comparable rentals rather than against your mortgage, get the insurance changed to a landlord policy before anyone moves in, screen every applicant the same way in writing, and put the tenancy on a state-specific lease, because the lease is the only document you will have when something goes wrong.
Renting out a home you own is a small business with one customer, and most of what goes wrong is decided before the tenant arrives: the price, the insurance, the screening and the lease. Here is the order to do it in, and the parts owners skip.
Before you list it
Tell the lender. Most owner-occupied mortgages let you convert to a rental after a year of living there, but they want to know, and an FHA or VA loan has its own rules. Tell the insurer, because a homeowner's policy does not cover a tenant-occupied home; a landlord (DP-3) policy does, and it costs about 15 to 25 percent more. Check the HOA's rental rules and any city licence: Las Vegas and Henderson both require a business licence to rent a residential property, and Clark County requires one in the unincorporated county.
Set the rent from what similar homes nearby are actually renting for, not from what covers your payment. A home priced $100 over the market sits an extra month, which costs more than a year of the difference.
Finding and screening a tenant
Write down your criteria before the first application: income at least three times the rent is the common floor, a credit threshold, no evictions in a stated period, references from the last two landlords. Apply the same criteria to everyone, in the same order, and keep the applications. Fair housing law is about consistency, and the record of it is what protects you.
Run credit, criminal and eviction screening through a service that is FCRA-compliant and charge only what it costs you (Nevada does not cap application fees, but a fee that is plainly a profit centre invites complaints). Call the previous landlord, not the current one, who may want the tenant gone.
The lease and the move-in
Use a lease written for your state. It has to carry the notices and the figures that state law requires (Nevada caps the deposit at three months' rent and the late fee at five percent, and requires 24 hours' notice before entry), and a form downloaded from the wrong state does not. Collect the deposit and first month before handing over keys, do a dated move-in inspection with photographs, and give the tenant a copy.
Decide up front whether you are managing it or paying a manager 8 to 10 percent of the rent to do it. The manager earns the fee on the first 2 a.m. call; whether you would rather keep the money is a question about your evenings, not about the property.
Questions people ask
How much profit should you make renting out a house?
Many owners make little or none in cash flow in the first years; the return is the mortgage being paid down and the appreciation. A useful test is whether the rent covers the payment, taxes, insurance, HOA and a reserve of about one month's rent a year for repairs and vacancy.
Do I need a licence to rent out my house?
In much of the Las Vegas valley, yes: the cities of Las Vegas and Henderson and unincorporated Clark County each require a business licence for a residential rental. Check the jurisdiction the property sits in, which is not always the one in its mailing address.
Can I rent out a house I still have a mortgage on?
Usually, once you have met the owner-occupancy period in your loan (commonly a year). Tell the servicer and change the insurance; renting quietly on an owner-occupied policy leaves you uninsured for the thing most likely to happen.