Top 10 Places Renting Out Your Home ​May Help You Save Money: If you live in one of these cities, you may want to consider being a landlord instead of selling your home

ZILLOW ^ | 10/01/2021 | Leanne Potts

[SeekAndFind]

Your house is your biggest investment, but it could also be a source of income you hadn’t thought about.

Get this: In 33 of the 50 biggest metro areas in the United States, rents are higher than typical monthly mortgage payments. If you own a home in one of those cities and you’re thinking about moving, it might be wiser to rent your home instead of selling it.

The typical rent-to-mortgage difference for these areas means renting could mean money left over after paying the mortgage that you could save for your dream vacation, invest for your retirement or use to pay off bills. And you’ll continue to build equity in an era when home prices are on the rise. Typical U.S. home values have risen 17.7%% over the last year, the biggest increase in 25 years. Zillow economists predict increases of 11.7% by August 2022.

Rents are on the rise

Rents are rising, too. In nine of the nation’s largest metros — Riverside, Calif., Tampa, Las Vegas, Jacksonville, Memphis, Phoenix, Virginia Beach, Atlanta and Miami — rents are more than 10% higher than their projected levels based on pre-pandemic trends, topping out at 15.6% higher in Tampa.

Metro areas across the South and Midwest dominated the list of cities where rents are higher than mortgages. Memphis topped the list, with rents averaging $1,504 vs. mortgages averaging just $948. That means a homeowner in Memphis could pocket around $550 per month by renting instead of selling their home. Miami came in second, with rents averaging $2,249 vs. mortgages averaging $1,727. That’s a $520 difference. Atlanta came in third, with rents averaging $1,787 vs. mortgages averaging $1,363, for a $424 difference.

Other top-10 metros included Indianapolis, Orlando, Oklahoma City, Charlotte and Birmingham, Alabama.

Top 10 metros for saving money by renting out properties

Metro Area	Size Rank	Typical Rent	Typical Monthly Mortgage Payment	$ Difference Between Rent and Mortgage
Memphis	41	$1,504	$948	$556
Miami	8	$2,249	$1,727	$522
Atlanta	9	$1,787	$1,363	$424
Birmingham	49	$1,271	$868	$403
Tampa	19	$1,819	$1,435	$384
Indianapolis	33	$1,375	$1,044	$331
Orlando	27	$1,758	$1,444	$314
Charlotte	24	$1,628	$1,339	$290
Oklahoma City	42	$1,210	$931	$279
Detroit	12	$1,387	$1,119	$268

 

Your single-family home could be a renter’s upgrade

Renting out your single-family home may not only be a win for you, it could be a win for renters who want out of apartments, which make up most of the nation’s rental properties.

“Single-family homes comprise about one-third of the nation’s total rental stock,” said Zillow economist Alexandra Lee. “Owners who do rent out their properties can provide both much-needed rental inventory in tight markets as well as sought-after space and amenities for families looking to move up from an apartment.”

If you’re not moving out of your house and can afford a down payment, you could consider buying a house and renting it out. Seven out of 10 rental properties in the U.S. are owned by individuals who own just one or two properties, according to a Pew Research Center study.

Crunch the numbers with our calculator

Being a landlord comes with some responsibilities and expenses. You’ll need to screen prospective tenants, and you will still be responsible for maintenance on the house and appliances. You’ll also have to pay for insurance, pest control and HOA fees (if applicable). If you hire a property manager instead of DIY-ing it, expect to pay 8% to 12% in management fees.

So before you take the plunge and become a landlord or add a second property to your real estate investment portfolio, you should determine whether the property you’re eyeing will have “cash flow.” That’s the industry term for whether an investment property will produce money after all the expenses are paid.

Use our rental property ROI calculator to crunch the numbers to see a ballpark figure of what you could earn renting your house over 5, 10, 20 or 30 years. The number may surprise you.

[Secret Agent Man]

the risks of renting to the wrong people are very high

especially if you haven’t done it before

and more and more people treat where they live like crap, especially if it’s not theirs

no vested responsibility, no concern

if they are told because of what they’ve done the security deposit isn’t coming back they trash the place.

[Organic Panic]

Until the government declares you can’t charge rent or evict dead beats.

[CatOwner]

After what we just went through (COVID lockdowns) with renters being forbidden from evicting tenants due to non-payment, I am not sure I would ever want to be a landlord. The government could just do this again.

[Alberta's Child]

After the fiasco we saw with that stupid eviction moratorium during COVID, I can’t imagine why anyone would even think of becoming a small landlord.

[metmom]

All blue cities.

Can you make enough renting after paying for repairs for all the damage done by the tenants?

I’ve seen what welfare deadbeats can do and do do to property.

I would not take the risk.

[stars & stripes forever]

After looking at trashed homes via renters and squatters on home makeover shows..

NO THANKS

[wildcard_redneck]

Hold onto income producing real estate like it was your own baby.

[jcon40]

Is this where a tax guy is supposed to warn us to be careful how you make money from your Primary residence ?

[DesertRhino]

Until the government tells you that you may not evict anyone. You’d be crazy to be a landlord now.

[Harmless Teddy Bear]

Sell. Unless you live there and plan to be a very involved landlord.

Do not place your rental with a property management company.

They do not give a hoot who they rent to because they get paid no matter what.

[imardmd1]

If, as in Delaware, the courts will not make the lessee honor a lease agreement such that the property manager cannot regularly without interruption supply an ongoing income without any damage to the property beyond wear and tear, then embarking on a venture like this is for a fool only.

When the local, county, and state governments are liable to be firmly in the hands of anti-capitalist progressive Dreamocrats, sell your property and get out, never looking back.

If you can't grasp the idea of why I am writing this, then your wit is much dimmer than even mine.

[Bob434]

[[the risks of renting to the wrong people are very high]]

Absolutely they are- a local store that has old run down cabins behind it, just sold and the owners can’t seem to be able to evict a vagrant who slept in one of the cabins for a log time now- they are having a terrible time getting him out=- He’s mentally ill- and refuses to leave-

[Gaffer]

Indeed. Renting out a home you actually like and value (one that you may want to go back and live in some day) isn’t an option that I would consider - even with a first/last and deposit AND credit checks and all that. As you say, some renters will just gut or trash a place or just put years of age on it in just short time. If you’re gonna rent something out, buy an investment property and don’t waste a lot of money on it.

[BiglyCommentary]

If the long term trend is a move to the suburbs then renting your home is just whistling past the graveyard.

[BiglyCommentary]

Hold onto income producing real estate like it was your own baby.

In an rat controlled area where you can't force renters to pay the rent or evict them, it is more like "Rosemary's Baby".

[Pollard]

$2,249

Being blue collar, that’s about the max I ever made.

[Ikeon]

Hubby " Hey honey, we're gonna make some extra money, Ive just rented out our home, they move in the 1st.

Wifey " where are we moving too?".

hubby " uh, oh, Some place cheaper"

Wifey " like where?"

cut to loud sound of 10,000 crickets

[Ikeon]

Have you ever looked at the inside of most peoples cars?? Especially single women, single moms?? Yes a high percentage of renters trash the place

[MayflowerMadam]

My friend managed a large apartment complex in CA. After people came in to apply to rent, he’d walk them to their cars and check out the interior of the cars. It helped him make a decision.