How to Make Money Renting Your House

Property prices and its appreciation is just going much stronger than stock markets with the reason that property rates may not drop as that fast as stock market is facing lot of times. Property prices is predicted to go up day by day. Lot of Indian as well as NRI look it as ever flourishing part of their portfolio. But sometimes it is quite confusing for lot of investors about getting best returns out of the property that they own.

Renting a property is one of the best ways where most often people would think about when they own vacant property. Renting is not only gives best returns out of property but silently enjoy capital appreciation. Therefore, it is good idea to invest in property and make money renting your home with minimum risk.

make money renting your house

The people who are running with low budget and cannot afford to invest in real estate then they may take a loan from bank and buy a property use the rent earned from the property to pay your EMI. Although you may be at no profit no loss situation but in long run you will be building property as an investment for yourself. You can consult a good real estate agent who will make it sure that you buy the best property with good appreciation & better rent in future.

The living standard and location are two important parameters for residential property. The purchase price and the rent that you earn from the residential property is purely based on these two parameters. You may find a monthly rent of 2,00,000+ for a 2 BHK flats in some posh areas of Mumbai & Delhi & you may find a monthly rent of 5000 to 6000 in some developing areas of Mumbai like Virar & Kharghar. So firstly, it is important to know your budget to buy a house.

Top 6 ways to make money renting your house

Here are different ways to make money renting your house that you buy as investment:

Paying Guest (PGs)

Paying Guest is the method where couple of unused rooms are given to individuals/families coming from different background and collect the rent individually. Here, the landlord would stay in the same house. There is no legal document signed between landlord and PGs. The rent or deposit of rent is quite less in this method.

Individual Leases

In this method, individual/family would pay security deposit and rent for himself and his family. It is most common trend to make money renting residential property. Here the house is given on rental agreement of 11 months

Company Leases

Make money renting your house to corporate employee is one of the most safest options. Here the respective company pays off the deposit and rental amount. It is advisable to sign off legal document stating rent and number of months

Guest House

If you have a well furnished apartment then you can convert it as guest house with a cook and housekeeper. You can give it on rent for short period of time. This way of renting a property is commonly seen at hill stations and in cities that are generally rented on celebration occasions like wedding.

Service Apartment

A complete furnished home with all amenities is also given on rent. Service apartment can make you earn higher rent, however your personal belonging may be at stake.

Renting your home to the travelers

Its one of the most lucrative way to make money renting your home to the travelers but at the same time a bit risky. There are many sites like where you can list your property & set your price how much per day charges you want. List your property only on those sites which are trusted, have good track record & can give you the protection guarantee with the host.

Points to negotiate before renting your house

Here are few points you need to consider and negotiate before you rent your residential property:

  • Know the profile of occupier
  • Amount of security deposit
  • Lease term
  • Maintenance like repairs/alteration cost of property
  • Extra cost of amenities like power availability, signage, parking etc.
  • Escalation in paying out rental amount
  • Maximizing or escalation of rent at the time of renewal
  • Property tax
  • Rental termination rights
  • Various indemnity clauses, lock-in period, force majeure and sub lease clause

Disadvantages of making money renting your house

There is unlimited advantages of renting your residential property but as every coin has two sides, way to make money renting your house may involve lot of disadvantages or risks:

  • Tenant may delay paying off monthly rent
  • Landlord cannot use his property for personal use for the time period when it is given on the rent.
  • Sometimes tenants may not vacate your house on time and keep on postponing the vacating date.
  • Occupant may misuse personal belongings like walls, bathroom fittings, furniture etc,

However, above said risks can be avoided if it is negotiated clearly with the occupant before you finalize the deal.

So if you have second home or own a property in other city then you can make money renting your house


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