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Avoid sticky situations and mortgage fraud with 5 essential steps to renting out a mortgaged home.

Can I Rent out a Home with a Mortgage? 5 Important Steps

There are some very lucky homeowners who locked in interest rates back at record-lows. If that's you, you'll think twice before giving that up! This common scenario is creating a new wave of ‘accidental landlords’, who have decided to rent out their home while living somewhere else. 

But can you rent out a home with a mortgage? This question could be more important than you realize. Most lenders have rules and criteria around renting a home they have financed. So before you hand over any keys, this guide will look at five steps you need to take to legally rent out a home with a mortgage.

When you applied for a mortgage, you would have to account for the intended use of the home. It’s likely you told your bank you intended to live there and the interest rate/lending criteria was set on this basis.

It may seem innocent enough to change your mind, but stating on an application that you intend to live in a home that you are buying as an investment property is considered mortgage loan fraud. This is why the first step in your research process is to read over the fine print of your mortgage and check the restrictions on the type of loan you have. 

Most lenders will allow you to rent out a home once you have lived there for 12 months or more — but it’s important to check your own contracts and conditions before proceeding. While you’re checking the fine print, make sure your HOA doesn’t restrict rentals. 

Step 2: Notify your bank or lending institution

This leads us to step 2: Be forthcoming with your lender about your intentions to rent out the home. This will immediately clear up any possible misunderstandings about your mortgage agreement. The lender may need to discuss or alter the terms of your agreement to allow you to rent out the home. 

This also gives you the opportunity to discuss your circumstances. For example, some loan programs such as a USDA, VA, or FHA loan restrict renting out a home within the first year, but may be able to waive this if you need to move for work. 

Step 3: Conduct an accurate rental cash flow analysis

Once you know that you can legally rent out your home, it’s time to do the math.

Your rental cash flow won’t be your rental income minus the mortgage repayments. There’s a lot of expenses, management and maintenance costs you’ll need to take into account. You may be able to claim your mortgage interest on tax, but you’ll also have to pay income tax on any earnings. You’ll also need to account for vacancies, capital gains tax, and depreciation. 

It’s always wise to discuss your financial situation with an accountant to understand your gross operating expenses and the tax implications of renting out your home. 

Read More: How To Do An Accurate Rental Property Cash Flow Analysis

If you have homeowners insurance, it’s time to make a switch. Homeowners insurance only covers owner-occupiers, so you will need dedicated landlords insurance for a long-term rental. Expect to pay an average of 15-20% more for a landlord insurance policy than you would for standard homeowners insurance. While more expensive, the right policy can protect your asset, provide liability coverage and even cover loss of rental income. 

If your home is looked after by BelongPRO, we offer dedicated insurance for rental homes right in the Belong app. You can even choose to deduct monthly repayments from your rental income to simplify your cash flow. 

Read More: What Type of Insurance Should I Get For My Rental Property?

The final step in turning your mortgaged home into a long-term rental is to decide how you want to manage the home. Belong regularly encounters homeowners who feel like they “got it wrong” the first time, or took on more than they bargained for. 

As a company who works with homeowners who are looking for a better alternative to self-managing a rental or are ditching property management, we hear a lot of gripes! Things like “I didn’t realize I would be taking on another part-time job”, or “It became really hard to chase rent when my tenant stopped paying”.

One of Belong’s specialties is working with homeowners that find themselves on the rental market unexpectedly or are taking the challenge of rental home management on for the first time. We offer financial security and peace of mind for homeowners with guaranteed rent, 24/7 support (to you and your residents) and a range of innovative services not available with traditional property management. 

Read More: What Should I Know Before Renting Out My House For The First Time?

Turn your home into a rental, without the worry

Belong looks after rental homes, but we’re no old-school property management company.  Think of us more as a technology company with a human heart. Where long-term renting meets hospitality.

Learn more about BelongPRO and see why thousands of US homeowners are ditching outdated Property Management in San Francisco, San Diego, Los Angeles, Austin, Tampa, Jacksonville, Salt Lake City, Seattle, Spokane, Concord, Berkeley, Orlando and many more.

Can you rent out a home with a mortgage? Not without a plan. Avoid sticky situations and mortgage fraud with 5 essential steps to renting out a mortgaged home.

Financial Security Made Simple for Rental Homeowners

Is it worth investing in environmentally-friendly upgrades in a rental home? Discover cost-effective ways to improve energy efficiency and attract more renters

7 Cost-Effective Ways To Make Your Rental Home Sustainable in 2024

Imagine you can choose between two similar houses. One has energy efficient upgrades, the other untouched — which would you choose? It’s safe to assume that renters are making the same decisions when looking for a place to call home. 

You don’t need to be an eco-warrior to know that running an energy efficient home makes sense. The energy use in our home has a big impact on our utility bills, but it’s also the top contributor for our individual carbon footprint. Home energy accounts for almost a third (32%) of the average American’s carbon footprint. 

For the millions of Americans who rent, reducing this carbon footprint is easier said than done. Most sustainability measures target homeowners, leaving renters to put up with emission-heavy homes. In 2024, it’s important for homeowners to invest in sustainability measures for their houses. This will help your investment to stand out and attract conscientious residents. 

Is it worth investing in sustainable options for a rental home?

Rental property owners want to know there will be a return on any investment made in the home. It’s important not to overspend and eat into your cash flow when modernizing a home. So what is the value in going green? Are environmentally-friendly rentals worth the time and cost?

Here are a few benefits homeowners might expect from investing in sustainability for their rental home:

Energy-efficient rentals cost less to run which makes them more attractive to applicants — reducing vacancies and attracting more rent than a non-efficient home

Research suggests that 61% of renters would pay more each month in rent for an eco-friendly apartment, which likely applies to single-family homes which cost more to run

Well-insulated homes have less issues with damaging mold growth

Sustainable housing aligns with the values of modern Millennial and Gen Z renters 

Sustainable rentals will have the upper-hand on competing homes, potentially increasing the rent value and decreasing vacancy rates

Lower overheads for any homeowners who include utilities in the rent

Sustainability measures in residential houses reduce carbon emissions (for the home we’re all responsible for, our planet!)

7 cost-effective ways to make your rental home environmentally-friendly

Before you jump in, do your homework. Decide what your sustainability goals are and set a budget. This will help you determine the most cost efficient way to modify your rental home. 

To get you started, here are seven ways to reduce the carbon footprint of your rental home without forking out on big ticket items such as solar panels and heat pumps. 

1. Improve the insulation of your rental home

Energy Star recommends sealing and insulation as the most cost-effective way to improve energy efficiency in a home. The US Environmental Protection Agency (EPA) estimates an average saving of 15% on heating and cooling costs (or an average of 11% on total energy costs) by air sealing homes and adding insulation.

Sealing and insulation measures could include:

Adding insulation to the ceiling/attic/walls of your rental home

Installing weather stripping on doors and caulking around windows

Apply window film to reduce cold air and condensation build up (also reduces mold!)

2. Upgrade to energy efficient lighting and appliances in a rental home

Old lighting and appliances can chew up a lot of energy. Switching to energy efficient LED bulbs will improve the energy use and lifespan of the bulbs in your home. 

When it comes time to refurbish or replace appliances in the home such as ovens, fridges and stove tops, even water heaters — look for energy ratings and appliances that will last a long time to serve residents for years to come. Check Energy Star for the government-backed standard for rating of new appliances. 

3. Install smart home devices that can monitor and improve energy use in your rental property

Smart home tech is not just for homeowners anymore, with plenty of affordable options on the market that can benefit renters and deliver energy savings. A rent.com survey showed that if renters could choose one smart home device, a smart thermostat would be it. Smart thermostats have the potential to save energy and utility costs for residents and are fairly inexpensive as far as devices go. 

Some new thermostats such as the Google Nest also offer HVAC monitoring, alerting homeowners when filters need changing or there’s a repair issue to address. This could go a long way in reducing maintenance costs in the long run, by allowing you to repair simple problems before they become costly headaches. 

4. Promote water conservation with your residents

Water conservation is crucial in regions prone to drought. You can help residents reduce water wastage in your rental home by ensuring fixtures are low-flow and leaks are addressed promptly. 

Installing aerators on faucets and modern low-flow showerheads to reduce water flow without compromising water pressure

Upgrading old toilets with dual-flush models that can use less water

Regularly inspect the plumbing fixtures and pipes for leaks that can waste water without your residents realizing

Opt for drought-tolerant plants in any garden areas and consider smart sprinkler systems that can control water use and switch off during wet seasons

5. Educate residents about your local waste management services

Part of the property taxes you pay will typically go toward waste management services, collecting garbage and recycling. For the bins in your rental home, it’s a good idea to clearly label bins so they are used appropriately to separate landfill and recycling. 

Some cities will also have organic collections, such as special bins for garden trimmings, food scraps (like vegetable peelings) and food-soiled paper products. Some states and counties like California and Sacramento have laws in place that govern organic waste collection and recycling in multifamily buildings. 

Not all localities will offer organic collections, however your single-family home may have space for a compost bin which will allow residents to compost their own food scraps and organic waste. 

If your property has a bulk waste collection date, you can also communicate this to residents to allow them to safely dispose of their unwanted furniture or appliances. 

6. Provide sustainability tips in your welcome pack

When providing a welcome pack to new residents, include some tips on how to run your rental home in an environmentally friendly way. This could include information like:

Rent checks are risky, but online rent collection has its own challenges. Discover the most secure way to collect rent from tenants and protect your finances.

Collecting Rent Safely: The Dos and Don'ts of Online Rent Payments

There are countless ways you can accept rental payments these days — but not without risk. So what is the best form of payment for rent? 

The safest way to collect rent is using a secure online payment system. Accepting rental payments by check or cash is the highest risk. It’s hard to track and less secure than systems that use encryption and comply with data protection laws. 

Of course, not all online payment systems are equal either. In this guide, we’ll cover the dos and don’t of online rent collection to protect you and your residents. 

What is the most secure way to collect rent online from tenants?

Without question, the most secure way to collect rent online is to use a payment solution that has been purpose-built for rent collection. These platforms track payments specific to your rental home, keeping a succinct ledger of funds paid without risk of payments going astray. 

This isn’t the case for popular peer-to-peer online payment apps like PayPal, Venmo, Zelle, and Cash App. While simple and user-friendly, they aren’t designed for landlords or rent collection. This leaves homeowners open to disputes and rent payment fraud. 

If you use the Belong app to collect rent, you’ll get a secure payment system made for homeowners. But you won't need to use it to chase unpaid rent, because the Belong team handles it all for you and even provides guaranteed rent. That means rental income is paid on time, every time, regardless of when your residents pay. If they miss a payment, Belong will keep your cash flow running smoothly while we do the legwork of getting residents back on track. 

Discover Belong PRO: The best alternative to property management in California, Florida, Texas, Utah, Georgia, North Carolina, South Carolina and Washington State - with more to come. 

Is it safe to use PayPal, Venmo or Zelle to accept rent payments?

Yes and no. On the one hand, these apps do make secure payments easy and avoid the need for you to give out your bank account information. But these apps support personal transactions such as ebay sales or splitting a restaurant bill with your buddies. As a rental payment solution, homeowners should take caution. 

For starters, rent payments are too high to qualify for free transactions. You’ll need a business account as these are not personal payments. Look out for fees and charges you may not have budgeted for in your cash flow analysis.  

Then there is the issue of payment disputes. Your tenants will be able to request a refund at any time, causing the payment to get stuck in limbo while PayPal or Venmo decides who it belongs to. They often side with the ‘buyer’, offering landlords little protection against forced refunds. 

The lack of tracking and transparency can also be a problem for tenancy agreements. With no credit bureau reporting, there is no incentive for residents to pay on time. And if you need to undergo eviction proceedings, receiving partial payment in one of these apps could work against you. In many states, proceedings stop when a payment is accepted, even if it’s less than the amount owed. 

In summary, risks when using a P2P payment platform for rent collection include:

Unexpected fees and requirements to maintain a business account

The risk of disputed funds and chargebacks

The need for manual record keeping and documentation

Less flexibility for tenant payment terms

No way to charge late fees or report payments to credit bureau 

Forces the homeowner to chase up late payments

Could slow down or block eviction proceedings, even when rent is owed

How safe is the Belong app for collecting rent?

Very! Belong takes safety and security seriously. All banking information connected to the Belong app is secured and fully encrypted by our payment partner, Plaid. Plaid is certified in internationally-recognized security standards, like ISO 27001, ISO 27701, and is SSAE18 SOC 2 compliant.

Our goal is to provide financial security to homeowners. This is why we guarantee rent and offer flexible payment options for the essentials such as landlords insurance and even repairs. By splitting the cost of expenses over your lease, you can stay cash flow positive on your own terms. 

Belong also gives residents the flexibility to choose payment terms that suit their needs. We even reward them for every on-time payment and offer credit bureau reporting to keep them on track. 

See why thousands of US homeowners are ditching outdated Property Management in San Francisco, San Diego, Austin, Los Angeles, Tampa, Jacksonville, Concord, Berkeley, Orlando, Houston and more.

Collecting rent safely: The dos and don'ts

Regardless of how you choose to collect rent payments from residents, here is a quick look at the ‘dos and don’ts’ to protect yourself as a homeowner. 

Prioritize the privacy and security of your residents



Familiarize yourself with local regulations around data collection



Use a secure payment gateway that uses encryption to process payments



If you need to accept a check, consider using electronic check processing for more reliable payment



Offer the option for tenants to set up automatic payments



Be flexible about the frequency of payments to reduce to risk of nonpayment



Be very clear with incoming tenants and communicate your payment processes 
clearly in the lease agreement, including due dates, amounts and instructions 



Keep records of payments including transaction amounts, dates and confirmation receipts — either through a payment app or manually 

What NOT to do when collecting rent online

Don’t accept cash payments as they are insecure and hard to track



Avoid relying on paper checks as they can bounce or be delayed



Avoid sharing your personal information financial information like bank account details



Don’t ignore tenant concerns about payment methods or frequency



Don’t assume your tenants know how to use your preferred payment method, provide step-by-step instructions if necessary 



Don’t assume that all P2P payment vendors are free or that they will side with you if a tenant reverses payment



Don’t forget about tax time — document all payments, income and expenses 

Belong partners with homeowners to offer financial security with guaranteed rent, hassle-free management services, and residents that love your home like its own. For rental ownership without the hard work, BelongPRO is a full service, end-to-end home management solution for rental properties. Learn more about BelongPRO here.

Disclaimer: We prefer to refer to members in our network as homeowners and residents, not landlords and tenants, since we’re on a mission to upend and redefine the traditional landlord-tenant relationship. That said, there’s a big difference between residential ‘homeowners’ and ‘landlords’ when it comes to legal and finance matters, so in some instances we have had to stick to the old term for owners of rental homes. This article is designed to support your research on rent collection and online payment solutions and should not replace advice tailored to your personal financial situation.  

Secure Rent, Guaranteed by Belong

Proven tactics for finding good residents fast and keeping them long-term

10 Proven Ways To Reduce Vacancies & Keep Great Rental Tenants Long-Term

Empty rental homes = empty pockets. To reduce vacancies and their strain on your rental cash flow, you need two things. Find good residents fast and keep them as long as possible.

There are many strategies and so-called shortcuts to increasing your rental cash flow. But if these increase vacancies, they can end up costing you more money in the long run. Cutting corners on maintenance, marketing and even property management could save you cash in the short-term, only to increase your vacancy rate.

Effective long-term renting requires a long-term mindset and strategy to match. In this guide, we’ll look at tried and tested ways to rent out your home faster — while keeping residents happy and ready to renew year after year. 

The key to getting your home loved quickly is to remove any barriers standing in the way of you and great tenants. That means investing time and effort into getting your home move-in ready, pricing it well, and having a robust vetting process ready to review applications right away. 

Get good tenants in your rental home with these 6 essential tips. 

Understand the current local market and value of your rental home

Asking for higher rent may seem like a quick way to increase your cash flow, but overpricing is a huge barrier to attracting applicants. Do your homework and adjust for seasonality and your local neighborhood. For the most accurate pricing, Belong PRO uses human smarts combined with clever algorithms and real-time demand to optimize your rental rate. 

Make strategic upgrades to your home to increase the value to residents


“We’ll fix that after a tenant moves in”, said the homeowner with an empty rental home. Putting off essential repairs, leaving aging appliances and presenting a home that isn’t move-in ready is no way to attract the best possible residents. Belong PRO sends an inspection team to every rental home to make sure everything is in the best shape before marketing. Doing this in the early stages ensures we find better residents faster and keeps them happier for longer. Our long-term mindset gets Belong an average of 29 qualified applications for every home listed.

Learn More: 6 Ways to Improve Your Rental Listing Price and ROI with Belong

Use attractive photography and detailed listings to generate interest



First impressions count. If your real estate photography is bad and your listing doesn’t sell the home in the best light, people won’t even bother walking through the front door. If you’re still using photos from 10-15 years ago, they’ll feel disappointed that the home doesn’t live up to what they saw online. 

Offer video or online tours to expand your applicant pool



Not everyone can make physical inspections. Adding video to your online listings can help widen your applicant pool to include people from out of town or who may be juggling shift work and child care responsibilities. This will mean getting some decent equipment like a tripod and lighting — or Belong PRO includes video in our online listings for no extra cost. 

List your home on 12-month terms during the summer peak season



Demand for long-term rentals peaks during the summer months. Listing your home during this spike in demand means your home will spend less time on the market and you can list at the highest price. 

If your rental home needs some improvements, aim to have them completed and ready to list between July-September. This will also mean if the resident decides to move after 12 months, you’ll be ready to list again at the next peak. 

Learn More: How To Achieve The Best Rent By Listing In Summer

Have good tenant screening practices in place to the streamline application process



If you’re screening and vetting tenants yourself as a self-managing landlord, you should take the time to create a process and set of criteria for reviewing every applicant. This will streamline the process, while also ensuring you don’t violate Fair Housing Laws.
Leaving vetting to the professionals is the fastest way to find qualified tenants. The Belong platform directly integrates with the most popular rental sites in the US including Zillow and Zumper. This can speed up the application process by attracting 30-50% more views for your rental home. Applications go straight into the Belong system, letting us contact and find the best applicant faster than a traditional property manager could. 

Learn more: Belong reduces vacancy times and costs for homeowners, with 66% less vacancy than competitors. See why thousands of US homeowners are ditching outdated Property Management in San Francisco, San Diego, Los Angeles, Tampa, Jacksonville, Concord, Berkeley, Orlando and more.

How to keep good tenants and maximize lease renewal rates

Once you’ve rented your home to trustworthy, reliable residents you want them to stay there. Renewing a 12 month lease eliminates your vacancy rate entirely and will avoid the process of marketing and tenant screening again. This is where a long-term mindset can pay off again. Here are four proven strategies for improving your lease renewal rates.

Keep your rental home in good condition



If you expect your residents to take good care of your home — you should too. Keeping a home comfortable and well maintained isn’t just your legal responsibility, it also means happier residents who are more likely to treat your home with the same respect. 

If you partner with Belong PRO, you’ll get instant access to our vendor network of over 10,000 contractors. You can subscribe to regular services such as lawn care, or even split the cost of repairs over the term of your lease.  

Learn More: Discover Belong PRO, the best alternative to Property Management in Seattle, Redmond, Oakland, and many more cities across California, Florida and Washington State.

Maintain a good relationship with tenants



How easy is it for your residents to get in touch with you or your property manager? Being slow to respond to questions or requests can be frustrating for residents, who may consider moving elsewhere. 

This is why Belong offers 24/7 concierge support to both homeowners and their residents. No question is too big or small, no time is inconvenient. It’s one of the many reasons why more than 73% of Belong residents renew their 12-month lease. 

Learn More: Good Tenant-Landlord Relationships: 6 Tips for Self-Managing Homeowners

Don’t wait until the last minute to ask about lease renewal



If your residents are planning to move out, it’s better to be informed so you can make plans for reletting. Get in touch with residents 60-90 days in advance and ask if they are interested in renewing their 12 month lease. If they are, great! If not, it gives you an opportunity to find out why and rectify the situation, or start planning on your pricing and marketing strategy when it’s time to put the home back on the rental market. 

When a lease is coming up for renewal, it’s a good idea to reevaluate the market and the value of your rental home. But, be mindful that large hikes are a quick way to send residents packing. If you have respectful residents who pay the rent on time, it’s worth taking their value into consideration before you adjust the price. Slower and more consistent yearly rent increases in line with inflation are easier to budget for than waiting for a few years and increasing by too much. 

Belong is simplifying the rental experience across the US and helping more homeowners reach their financial goals on their own terms. For people who want a completely hassle-free home management experience with guaranteed rent and 24/7 concierge service, check out Belong for homeowners.

Reduce rental vacancies and increase long-term lease renewals with 10 proven tactics for finding good tenants fast — and keeping them longer.

Melanie Kershaw

Mel Kershaw is a Content Lead at Belong. With an extensive background working with technology companies including Eventbrite and Yelp, she’s always looking for ways to create educational and informative articles that simplifies tech and solves problems for her audience.

Tamara Epelbaum

Sparsh Mehta

Harrison Kelly

Jill Jaracz

Annalise Mantz

Tamara Epelbaum

Sparsh Mehta

Harrison Kelly

Jill Jaracz

Annalise Mantz