What smart home technology attracts renters? Discover what tech renters want most and five options to get the most bang for buck in your rental home pricing.

What Smart Home Tech Do Renters Want Most in 2023?

Renters appreciate smart home technology in their living spaces as much as homeowners. What was once seen as an optional luxury has fast become something we interact with daily, making our homes more comfortable or efficient. This has made the technology more accessible for everyone, including people who live in rental homes. 

A 2022 survey from Rent.com found that 82% of renters want at least one smart device or system in their home. Expectations aren't wild either — 41% say 1-2 devices would be their preference.

Of course, as the homeowner there are pros and cons to investing in smart home tech. You don’t want to be forking out for products and installation unless you can be certain that 

a) it will offer a return on your investment and 

b) that it won’t cause more trouble than it’s worth! 

Let’s look at the pros and cons of tech in rental homes. Then we'll dive into five options that attract renters to help your home achieve strong interest and long-term love on the rental market.

What are the benefits of smart home technology in rentals?

What are the drawbacks of smart home technology in rentals?

What smart home products do renters want most?

1. Smart home devices can provide energy and cost savings for your residents 

The biggest drawcard for residents is smart home features that will save them money in the long run. Technology such as smart thermostats and automated lighting systems can save energy and reduce utility bills for residents. Offering lower running costs is a good incentive for spending a little more on rent, knowing there will be savings on the cost of living. 

2. Smart home devices can improve security on your rental house

Improving the security of your rental home can be hugely beneficial to both you and your residents. For starters, landlords have a legal duty to provide a safe and habitable home for their tenants, which includes taking reasonable steps to minimize the risk of crime taking place on their property. Investing in smart devices that can reduce crime will not only make your residents feel safer, it could also reduce your liability for criminal activity and even lower your insurance premiums. 

3. Remote monitoring lets you take quick action to protect your rental home

There are now smart home products on the market that can alert homeowners to problems before they become emergencies, for example:

Smart smoke alarms that detect carbon monoxide levels, allowing you to evacuate residents if levels are dangerous

Water sensors that alert of leaks to avoid flooding and excessive damage to your home

Doorbells with video and/or motion sensor cameras can notify of any unauthorized access to the property when it's vacant. If you do notice suspicious activity on your property, you can alert the police. 

1. Investing in smart home devices may not be worth the upfront investment

If technology won’t increase the perceived value of your home, you won’t be able to pass on any costs in your rent. The more you spend, the more it will eat into your rental home cash flow, so it’s important to consider what people really want/need before spending money. 

2. Not all smart home technology will be compatible with your resident’s devices

Like any technology, you get what you pay for. You might find a great bargain on Amazon, but if that budget knockoff from China isn’t compatible with the devices your residents use, it won’t add any value to your rental home. A frustrating user experience won’t do anything to endear people to staying in your home. 

3. Connected rental homes can create privacy concerns for residents

It’s important not to install filming devices within a rental home that you can view residents on, as this is a violation of their privacy and quiet enjoyment of the home. There’s also the possibility of having a connected device hacked — providing unauthorized access to your rental home. Do your research on how secure technology is before investing in any devices. 

Read more: The Dos and Don’ts of Home Security in a Rental Property

4. Network outages could lead to distressed phone calls

Smart home technology relies on stable internet connections and regular software updates. Network outages or device malfunctions have the potential to cause chaos if your residents can’t control them until the issues are resolved. The last thing you want to do is add ‘tech support’ to your long list of jobs as a rental homeowner, especially if you’re also managing the property yourself. This is another reason not to invest in products that are too cheap/unreliable and to make sure essentials such as locks can also be accessed manually. 

What smart home products are the best investment for a rental home?

So when it comes to smart home technology, what is or isn’t worth investing in for a rental home? Here are five smart home products that make the most sense for rental homes.

When it comes to tech that renters want, smart thermostats top the list. The rent.com survey showed that if renters could choose one smart home device, a 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.  

2. Smart smoke and carbon monoxide detectors

This might not be high on the most-wanted list, but smoke detectors are legally required for all homes. Upgrading to a smart smoke detector in your rental gives you the benefit of being able to receive alerts during emergency situations and monitor carbon monoxide levels. It’s important to remember that your home won’t always be occupied, so being able to know of fire danger when the home is vacant could save you thousands of dollars in damages. 

Video doorbells can be a great entry point for security cameras, without the privacy concerns or expense of monitoring an entire home. You can allow residents to control them when your home is occupied and take over to monitor the home when it’s vacant. They can be a good security option to monitor for parcel theft or unauthorized access via the front door. 

Renters who need a place to both live and work will pay a premium for great work zones and it will avoid disgruntled WFH’ers leaving due to poor coverage and connectivity. 

While not a ‘smart home device’ per say, don’t overlook the importance of having spaces that can be connected easily for modern professionals who work from home. This could be as simple as ensuring there are enough outlets for laptops, to buying a wifi extender such as Amazon’s eero or Google’s Mesh wifi. 

What is normal wear and tear on a rental house vs. tenant damage? Find out how to assess for and protect your rental home from costly damages in between tenants

Normal Wear and Tear vs. Tenant Damage: How To Assess Your Rental Home

When a resident in your rental home vacates, you need to hone an essential skill: being able to decipher between regular wear and tear vs tenant damage. After a year or more, your house won’t be in the exact same condition as when you put it on the rental market. But what can come out of a security deposit and what do you need to pay for?

It’s time to play detective, only with less trench coats and more paint swatches.

What is normal wear and tear on a rental property?

How to track wear and tear vs. damage in a rental home

Does homeowners insurance cover accidental damage in a rental home?

Like a favorite pair of shoes, some things deteriorate with regular use. Your home is no different. Wear and tear describes what you would expect from regular use of a home. It doesn’t mean your residents didn’t show enough care, but there’s a reason why the term “lived in” is often used to describe something that is showing its age. 

Here are some examples of where to play Sherlock Holmes to consider what could be wear and tear vs damage:

Faded paint, minor nicks, and a few scuffs or scratches are all part of normal wear and tear. Then again, perhaps your resident went a bit overboard sticking things to the walls and have left tears in the paint. Or remnants of a mini picasso can be seen from a two year old’s efforts with the crayons. 

Wear and tear vs. tenant damage: Consider the property’s age and what is reasonable to expect from how long your residents have been in place. If there’s a few extra marks than before, this would be normal. If there’s holes or large tears in the paint — or a piece of furniture has visibly scraped off some drywall, you should ask to have it repaired or deduct the costs from the security deposit. 

Unauthorized paint and wallpaper is another contentious issue. Be sure to let your residents know that they need to seek permission before making alterations to the walls. Otherwise you can reasonably ask for them to be restored to their original condition, minus some standard wear and tear. 

Over time carpets lose their plushness, develop some snags, and bear the evidence of many accidental spills. Part of turning over a rental home involves having the carpets professionally cleaned, so waiting until this has been completed will show a true picture of whether carpet changes are due to general foot traffic or something else. Excessive stains or a suspiciously iron-shaped burn mark could indicate accidental damage.

You can’t charge a resident for foot traffic and reasonable wear of carpet or flooring. If you find evidence of serious stains such as oil, paint or pet urine that would require additional costs from a professional carpet cleaner to remove, you can definitely ask for residents to cover this cost or withhold this cost from a security deposit. 

For wooden flooring, again scuff marks would be seen as acceptable as would any warping or changing from climate conditions. But if a pet dog has been digging for bones in your living room this would be considered damage.  

The windows and frames are another thing that should be checked over. You can’t rent out your home again with broken windows, so repairs will need to be made quickly. If it appears that a window has cracked due to settling foundations, you can’t hold a resident responsible for damage. Rotted frames are another homeowner responsibility. 

Wear and tear vs. tenant damage: The occasional scratch, crack, or foggy seal is to be expected. Shattered glass from a friendly game of baseball is a definite sign of tenant damage. A pet cat using the patio door or window screens as a scratching post is another sign of damage that residents would be responsible for. 

Bathrooms can be a tricky one. It is your responsibility as the homeowner to ensure that essential facilities like plumbing, toilets and water heaters are well maintained and functioning. It should also be kept free of mold where possible. That means ensuring leaks don’t go unchecked and that any damage or aging pipes are repaired without delay. 

Wear and tear vs. tenant damage: Leaky faucets, a running toilet, or a clogged sink? Normal wear and tear. But an overflowing toilet from playing “will it flush?” — that’s deliberate misuse and you can charge for the plumber call out fee. 

The grout in tiles will also deteriorate over time and is considered wear and tear. But broken/smashed/missing tiles from excessive force is damage.  

There are two key ways to really determine wear and tear vs. damage in a rental home:

Take photos before and after each new resident moves in

Take notes and extra photos during routine inspections

Routine inspections of your rental home aren’t about being ‘Big Brother’ and intruding on your residents. They’re essential to protecting your investment, by keeping tabs on any wear and tear on the property. It’s also an opportunity to connect with your residents to make sure they’re happy and are sticking to the conditions of the lease agreement. 

During rental inspections, you (or a representative such as Belong or a property manager), should be looking for damage, but also for wear-and-tear on the property that has the potential to become an issue if left unattended. 

Ask residents if they have noticed anything different, take written notes and also photos. When the home is vacant, these notes and photos will make it easier to spot the extent of wear and tear and whether or not anything could be seen as damage. 

If your home is on Belong’s residential network, we schedule home visits on your behalf to connect with the residents, assess if anything needs fixing, and ensure there are no lease violations occurring. Inspection reports and information can be delivered directly to your smartphone via the Belong app. 

If we identify any maintenance issues or damage, we can provide you with a quote from one of 10,000+ vetted partners in our vendor network to take care of the job and even let you split the costs of any unexpected repairs in easy installments over the term of the lease. 

Short answer: no. Many homeowners are surprised to discover that their homeowners insurance policy doesn’t actually cover them for anything once it's tenant-occupied! 

To be covered for damage while a resident that is renting your home, you need dedicated landlords insurance. All landlord policies vary, so you will need to speak to a provider regarding exactly what they cover. 

When you join the Belong network as a homeowner, you’ll be required to have a landlords insurance policy, either through our network or a provider of your choice. This ensures you are protected as a homeowner, covering the cost to repair or replace damaged property, especially if your resident was not at fault. 

Learn more about the difference between homeowners vs landlords insurance here.

Ready to let someone else take on the load of managing your rental home?

Simple protection of your asset (and ensuring you don’t have to play detective over scuffed wall paint!) is just one of the many ways Belong is making it easier than ever for individuals to achieve financial freedom with a rental home. 

Visit our homeowner's page to find out more about how our services are helping people to ditch property management in Seattle, San Francisco, San Diego, Los Angeles, Tampa, Orlando, Jacksonville, Miami and many more.

Belong used data compiled by the Eviction Lab at Princeton University to compare how eviction levels changed in 11 major U.S. cities in 2022.

How eviction levels have grown in 11 major cities

In 2022, a handful of large U.S. cities saw landlords remove renters from homes at rates that surpass the typical pre-COVID-19-pandemic rate, according to a new report from the Eviction Lab at Princeton University.

Belong used data compiled by the Eviction Lab to compare how eviction levels changed in 11 major U.S. cities in 2022. The cities are sorted by the change in eviction filings relative to the historical average from 2021 to 2022. Not every U.S. city was considered in this analysis due to the lack of comprehensive, current data. It looks at a geographically diverse cross-section of cities with populations of 1 million or more and should not be viewed as a comprehensive ranking.

Unlike other kinds of housing data real estate agents and other professionals consult and trade daily, eviction data is not easy to obtain. Historically, the data has resided with thousands of local governments where evictions occur. There are few places where that data has been made readily available online until now.

Through its data collection, the Eviction Lab gives the American public a peek into a part of public life that has not always been made public—tracking eviction filings in 34 cities with the help of organizations on the ground in those communities. An eviction filing is the legal document created when a landlord files a case in court to have a tenant removed from their property.

Eviction rates rose in all 32 cities tracked by the Eviction Lab in 2022. The eviction rate in this analysis refers to the number of evictions per 100 rental properties in a given area. In all, landlords in these places filed about 970,000 eviction cases, up 79% compared to the year before.

The increase comes after a period of unprecedented federal housing protections for renters.

The pandemic did something no economic catastrophe in recent history has—it convinced legislators to enact sweeping national policies that materially lowered the rate of evictions.

For roughly 1.5 years, the country maintained the strongest safeguards for keeping renters housed in recent history. In September 2020, the Centers for Disease Control and Prevention imposed a federal eviction moratorium, which was essentially a ban on evictions under most circumstances, including failure to pay rent, as a measure to protect public health by preventing the spread of COVID-19. The disease spreads more quickly when people are forced to live in close quarters or share housing with friends, family, or strangers at a homeless shelter or other group housing.

The federal government also allocated billions in rental assistance dollars for tenants as part of the bailout packages passed to help Americans weather the economic effects of the pandemic.

Those measures, however, were temporary and elicited concern from landlords who said it tied their hands when trying to remove problematic tenants. Proponents argued that with so much aid money being made available, there was no need to remove tenants. But only the most progressively aligned members of Congress were willing to continue pushing for a continuation of the policy, which began under former President Donald Trump's administration but was struck down by the Supreme Court in August 2021.

Housing advocates warned that a wave of evictions would emerge as localities rescinded their respective eviction moratoriums following the Supreme Court decision. That wave, however, failed to materialize in the final months of 2021.

Still, data from select cities in 2022 shows evictions did surge in some places shortly thereafter.

And economic conditions continue to become more difficult following the initial few waves of COVID-19 infection in the U.S. Historic inflation reared its head in late 2021 and has burned through Americans' purchasing power in the years since—with housing costs rising particularly sharply.

Las Vegas; Minneapolis; and Austin, Texas have seen eviction filing rates increase the most of the large cities analyzed. The cities that have seen rates grow most steeply are also housing markets that were incredibly popular amid the hot pandemic housing market. Some of those markets have seen home prices drop since late 2022 after property values climbed unnaturally high in just two years.

Learn more about how our Seattle property management team can help you build financial freedom by getting rental payments on time every time.

- Eviction filings, 2022: 67.7% of historical average (16.7 percentage-point growth from 2021)

One year after the federal eviction ban fell, Cleveland City Council passed a new law making it so that tenants can avoid being removed from a property if they pay the full past-due balance on their unit before a court hearing. The law also allows them to continue living in the unit while awaiting disbursement of rental aid if they've been granted any assistance. Distribution of rental assistance has been slow in some parts of the country, causing frustration for landlords and tenants alike.

- Eviction filings, 2022: 103.2% of historical average (25.3 percentage-point growth from 2021)

Florida Gov. Ron DeSantis signed a new affordable housing bill into law in March 2023, which critics have argued won't help renters. The law drew condemnation from tenants' rights groups along the Florida Gulf Coast for banning the local government's ability to impose rent control. The state has consistently been one of the fastest-growing in terms of population—a trend that only continued as property values skyrocketed over the pandemic.

- Eviction filings, 2022: 48.0% of historical average (29.3 percentage-point growth from 2021)

After a brief moment of panic in 2020 as New York City became the epicenter of COVID-19 spread on the East Coast, living costs have increased in New York at a breakneck pace. Throughout 2022, renters were getting hit with rent increases that amounted to 20% to 30% more than the year prior. These hikes spurred lawmakers this year to consider enacting new rent control laws that would keep landlords from hiking rental rates more than 3% and would affect an estimated 1 in 2 renters in the state.

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- Eviction filings, 2022: 67.3% of historical average (35.1 percentage-point growth from 2021)

A recently released research report from Cornell University looked at studies in Philadelphia and other comparably populated cities and found a link between communities that had higher eviction rates and increases in crime as well as lower voter participation in elections.

The city's eviction diversion program was highlighted in recent years as a model for other cities, having helped prevent unnecessary evictions of residents. Recent reporting has found thousands of Philadelphia residents spend more than half of their income on rent alone.

- Eviction filings, 2022: 106.2% of historical average (36.7 percentage-point growth from 2021)

Nashville's workforce has benefitted from a surge in new residents moving there in recent years as Americans sought lower costs of living and took advantage of their newfound flexible work freedoms. At the same time, housing costs have risen in the metro area, prompting the city council to consider a bill that would create a new online affordable housing tracking dashboard.

Explore a comprehensive property management blog that covers tips, trends, and stories related to long-term renting, home renovation, and more.

- Eviction filings, 2022: 105.6% of historical average (40.8 percentage-point growth from 2021)

Discover how eviction rates have surged in 11 major cities across the United States, according to data compiled by the Eviction Lab at Princeton University. Our analysis highlights the changes in eviction levels in 2022 and the impact on the local housing market and tenants.

Eviction Trends in 11 Major US Cities: An Analysis by Eviction Lab at Princeton University

What you need to know about homeowners vs landlords insurance (and why you need both!)

Homeowners Insurance vs. Landlord Insurance: What Policy Do You Need?

Did you know that homeowners insurance only offers protection for owner-occupied properties? That means if you move out and put your home on the rental market, you could find yourself no longer covered and liable for expensive costs should anything happen to the property. 

It’s a common misconception that homeowners insurance is enough to cover all homeowners. After all, we ourselves prefer to refer to our landlords as ‘homeowners’ because that’s what you are. However, for the purpose of this article we need to make an important distinction between owner-occupied homes and landlords with tenant-occupied homes. 

Let’s take a look at what homeowners insurance and landlords insurance provides — and how Belong can simplify the whole process. 

What’s the difference between homeowners insurance and landlords insurance? 

While both insurance products are designed for homeowners and policy coverage will vary based on the provider you choose, there is a clear distinction. ‘Homeowners Insurance’ offers coverage for owner-occupied residential property while ‘Landlords Insurance’ offers coverage for tenant-occupied residential property. 

The main reason for this difference in coverage is that homeowners require insurance for their physical property, whereas landlords also need coverage for liability and damages that could arise from their residents in place. 

If you are a homeowner and have a secondary home on the rental market, you will need both types of insurance — one for your home residence and the other for your rental home. 

What does landlords insurance include that homeowners insurance doesn’t?

Like homeowners insurance, landlords insurance will protect the main structure of your home from disaster such as fire or storm. Depending on policy, you may be required to pay an additional fee for optional extras such as flood coverage or earthquake damage. Homeowners insurance usually includes contents insurance too, covering all your personal belongings within the home. 

For landlords insurance, unless you have a furnished rental, you won’t need to cover the contents as they don’t belong to you. The other key difference with a landlord policy is the liability coverage offered. For example, if a tenant is injured while living in your home (like tripping over a crack in the driveway or scalding themselves on a faulty hot water system), you could be responsible for their medical costs and will want to be insured for any liability. 

Accidents happen and even good residents can cause accidental damage to homes. Landlords policies will cover damage to your home as a result of the resident and some will also cover for loss of rent if the property becomes unlivable, helping to insulate your cash flow against this risk. 

Why does Belong insist on landlords insurance?

Everything Belong does is designed to act in the best interest of our community members — both homeowners and residents. 

When you join the Belong network as a homeowner, you’ll be required to have a landlords insurance policy, either through our network or a provider of your choice. This ensures you are protected as a homeowner and that property damage can be taken care of to keep a roof over the head of your resident. 

For additional peace of mind, we have the same requirement for your residents, with renters insurance a requirement of all tenants we place. 

How does Belong simplify landlords insurance for homeowners?

Finding the right policy can be a cumbersome process. Not all insurance companies offer both homeowners and landlords insurance policies. Those that do might insist that you hold both with them, even if their products aren’t the best fit. Let’s not even get started on navigating those awful websites and still needing to spend ages on the phone relaying a million pieces of information to sign up. 

Like all outdated processes that are broken within the rental and property management industry, Belong is taking this on to simplify how homeowners get insurance to protect their rental home. 

When you join Belong and have your home loved by us, you have the option to purchase a dedicated landlord insurance policy that protects your home, meets our requirements — and could save you time and money. We can have you signed up and fully covered in an instant, it’s all done within your Belong account. You can either pay the premium upfront, or have the option to split the payments into 12 installments. You’ll receive your monthly guaranteed rent, minus the repayment — so you won’t need to think about it again or set aside money for it in your household budget. 

Simplifying protection of your asset is just one of the many ways Belong is making it easier than ever for individuals to achieve financial freedom with a rental home. 

To see if your home is eligible and learn about how Belong is helping more people have a successful rental property without lifting a finger, check out our dedicated homeowners page.

Do you need homeowners or landlords insurance? What's the difference? If you own a rental home, here's what you need to know about insurance (you need both!)

Is rent control really bad for landlords? See the pros and cons of rent control and learn how to price your rental to keep your home profitable and compliant.

Rent Control Laws for Landlords 2023: The Good, The Bad and The Profitable

Love it or loathe it, rent control is back on the agenda in 2023. After years of sky-rocketing rents and the end of eviction moratoriums, many cities across the US are considering rent control measures to try and limit displacement of renters.

When rent control is mentioned, debate rages. But is rent control really bad for landlords? And if you own a home in a city with rent control, how can you ensure your investment is sustainable while remaining in line with local ordinances? 

In this article we’ll explore the ins and outs of rent control measures in the US as well as how to ensure your rental pricing strategy keeps your home profitable. 

What are the pros and cons of rent control for landlords?

Rent control ordinances aim to curb huge rent-hikes and prevent people from being displaced in their hometowns. These measures are unpopular with landlords, because they limit the amount of rent that homeowners can charge. When coupled with rising costs such as high inflation, mortgage rates and property taxes — it risks diminishing your rental cash flow as a homeowner. If your costs go up, a rise in rents will help cover these to keep your cash flow stable. 

Some ordinances also make it more difficult to evict tenants, such as California’s ‘just cause’ evictions, which prohibits landlords from ending leases without an accepted reason. 

Rent control is not all bad news though. Rent control favors current tenants, by protecting them from huge hikes in rent and allowing them to stay put long-term. From a homeowner perspective, this promotes stability in your rental. Low turnover in residents can be financially rewarding, because you’re not facing the costs associated with vacancy, advertising your rental home, and re-letting on a regular basis. 

More predictable rental income, which can be beneficial when a market is turbulent or in decline

Longer-term tenancies, reducing the cost of vacancies and turnover 

Set and predictable structure for allowable yearly increases

Reduced displacement in your neighborhood, protecting more people from being forced out due to skyrocketing rents

Some rent control legislations will allow for larger increases when capital improvements have been made, increasing the value of the home 

Sometimes rent-controlled units are easier to buy and have less competition as they only suit long-term investments

Limited profits with a cap on how much you can raise the rent

Tougher regulations and compliance which can incur extra administrative costs or work

Less incentive to make improvements on some properties, which may affect the long-term appreciation of the home

Can be off putting for first-time landlords who aren’t sure how to navigate the rules

Whether rent control appeals to you or not as a landlord will come down to two major factors:

Your personal financial situation and goals 

Not all rent control ordinances are the same. Some are more generous than others with increased caps. Many homeowners also find they can benefit from the long-term stability of rents and appreciate not having to rely on market peaks and troughs. Others may find their local restrictions off putting or feel less incentivized to spend money on the property with a cap on income. 

Which US cities have rent control or rent stabilization laws?

Oregon and California are the only two states with statewide rent control laws in place. Rent control laws are more common at a local level, existing across the District of Columbia and within cities in New York, New Jersey, Maine, Maryland and Minnesota. 

It’s important to view rent control or rent stabilization laws at both a state and local city level. This is because some states have enabled rent control, but local cities have not enacted any. Other local jurisdictions may have rent caps that override the statewide law. 

Here are two examples of rent control within the State of California.  

San Diego does not have local rent control laws. But some properties will fall under the California Tenant Protection Act of 2019. California rent control laws caps annual rent increase by either 10% or 5% plus the local inflation rate (Consumer Price Index or CPI) — whichever is lower. In 2022, San Diego’s inflation rate was 8.2%, making the CPI + 5% rate above 13%, so the lower 10% cap would apply.  

In Beverly Hills, local rent caps apply. Homeowners in Beverly Hills can increase rent once every 12 months, limited to 3% of the current rent, or the CPI, whichever is higher. With inflation rates high, the 3% cap will be too low so the CPI rate would apply. 

Often single-family homes and units built before a certain date will be exempt from rent control ordinances, which is why you need to do due-diligence before raising the rental rate on your home. If you enlist professional help from real estate experts like Belong or a good local property management company, they will guide you through the process of increasing your rent lawfully.

Is my rental exempt from rent control laws?

Most rent control laws apply to apartments rather than single-family homes. If you own a single-family home or duplex as an individual, it’s likely that you will be exempt from rent control laws (check with your local municipality to confirm). If you manage your rental as an LLC or as part of a corporation or real estate investment trust (REIT), exemptions won’t apply. 

There are also common exemptions such as for newer housing (built within the last 10 - 15 years) or for those who are subsidized under government-sponsored programs. 

If you are exempt from rent caps and other limitations such as just cause evictions, you will need to include this information in writing to your resident.

How should I price a rental property with rent control laws?

Rent control or not, getting the rental pricing on your home will have a big impact on long-term profitability. Price it too high and you could fail to attract the right residents, enduring costly vacancies. Price it too low and you could be locked into a below-market rate and struggle to maintain enough cash flow long term. 

Looking at comps alone isn’t enough when the market gets complicated or rent controls are in place. And it’s time to throw outdated models (such as asking for 1-2% of the property value) out the window. Most real estate agents and property managers are still doing this, simply because it’s the way it’s always been done. 

How Belong finds Goldilocks pricing for your rental home

“The way it’s always been done” is exactly why Belong has ditched the property management model to offer a completely unique service that takes a humanized approach to the rental market —  including pricing. 

When helping homeowners find the right rental rate, Belong uses technology to blend live market data with an all-important metric: real demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. And because we extend our unique hospitality for 24/7 concierge service to renters as part of our community, we attract the best of the best to place in your rental property.

The result is fewer vacancies, great people caring for your home, profitable rental income, and no tricks or compromises that could put you at legal risk or devalue your home as a rental investment. We even guarantee that the rent is paid on time every month, regardless of when we receive it. 

Disclaimer: We don’t enjoy using the word ‘landlord’. 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, sometimes the words tenant and landlord need to be used to provide clarity on legislation — so in this article we use both. This article provides a guide for homeowners of residential property for rent in the US, but should not replace financial or legal advice.

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What are the financing options for investment properties? Learn more about conventional loans, hard money and home equity options for buying a rental home.

2023 Guide to Financing Options That Help Your Rental Home Cashflow

Not all debt is bad. The right debt has the potential to increase your wealth long-term — like a mortgage or using the equity in your home as a down payment on a rental investment home. The right finance can also help you maximize your cash flow and appreciation of the home by funding renovations and sought-after amenities. 

But before you start shopping for loans, it’s a good idea to get up to speed on your options. 

For instance, did you know that most banks don’t offer conventional bank mortgages for second or investment homes but instead offer a specific investment property loan? Or that you can’t access government-insured loans to buy a rental property unless you are an owner-occupier within the duplex/multifamily complex? The use of the home plays a role in applying for finance, so consider speaking to a broker about your intentions and options. 

The main goal is to ensure your rental home can achieve positive cash flow. This means keeping repayments, interest rates, and ongoing costs below what you can earn in rental income. It could also mean borrowing money to fund improvements that will yield more rental income and make the home more profitable in the long-term.

This article covers the following FAQs on rental home financing:

Can I get a conventional loan to finance a rental property?

What is a jumbo loan and do I need one for a rental home?

Can I finance a rental property with an FHA loan or special program loan?

Are Hard Money or Bridge Loans a good idea to finance an investment home?

Can I use the equity in my home to finance a down payment for an investment property?

Mortgage loans fall into three main categories; Conventional loans, FHA loans and special programs. Conventional loans simply describe any type of loan that isn’t government-insured, like a standard mortgage from a bank or credit union lender. 

Some lenders may provide a conventional home loan for a rental home or investment property, but most won’t take rental income into consideration for a standard mortgage loan. Instead, they will ask existing homeowners to apply for a specific ‘investment property loan’ to finance a second home they won’t live in. This will have different requirements, such as a stronger credit score and down payment. 

Requirements for an investment property loan include:

In some counties, the cost of housing exceeds the limits of the Federal Housing Finance Agency (FHFA) limits. In 2023, the limit for bank loans on single-unit properties is $726,200 for most areas and up to $1,089,300 for high-cost areas like San Francisco County. 

Jumbo loans allow you to borrow a higher amount to finance in a pricier area or to buy a larger home. They will have different lending requirements and may need you to have a higher income, credit score and down payment. 

FHA and government-backed loan programs are only available to owner-occupied properties. If you’re looking to access one of these loans to finance a rental home, you will also need to live on site. That means if you purchase a duplex or multifamily complex with a view to live in one of the housing units, you could qualify for an owner-occupier loan while also earning rental income. 

Hard Money (or ‘Bridge Loans’) offer more flexible terms and can be approved more quickly than conventional mortgages. Because of this flexibility, they are preferred as short-term finance options for real estate investors, for example when investing in a home to renovate quickly and ‘flip’ for profit. 

Private lenders have lower credit score thresholds and determine the property’s potential value to decide if they will loan the money. The downside is that they have higher interest rates, high fees and closing costs. 

If you’re looking for a long-term investment solution or want to renovate a property to put on the rental market and appreciate over time, hard money loans aren’t the right solution for you. They’re also not ideal for anyone financing their first rental home. 

Home equity is the difference between what your home is worth and how much debt is owed against it. When your house appreciates and/or you have paid off a chunk of your mortgage principal — you have equity. This value can be drawn from to finance a down payment for another property which can be used on the rental market to help pay down the loan. 

Once you own at least 15% - 20% of your home’s value, you may be eligible for:

Another type of equity loan is the reverse mortgage or Home Equity Conversion Mortgage (HECM) for Purchase, available to homeowners over the age of 62. We have not detailed this as a financing option because it’s only available to owner-occupiers and a reverse mortgage can be canceled if you leave the premises and rent it out.

A cash-out loan refinancing involves taking out a new mortgage on your home for more than what you currently owe — receiving the difference in cash. You can use the cash-out refinance funds as a down payment on a new investment property or buy the property outright. 

This could be especially helpful if you need to pay out an existing mortgage or buy out siblings to gain full ownership of an inherited home. 

The amount of money or equity you can cash out will depend on the current value of your home and your current loan balance. You will need more than 30% equity to cash out, and you can borrow up to 80% of your home equity. Consider that a cash-out refinance means you will have new loan terms and incur closing costs and fees. These will need to be factored into your rental cash flow analysis. 

A Home Equity Loan allows you to borrow against the value of your home, with the money delivered as a lump sum. Home equity loans have a fixed interest rate and set monthly payments. These loans are ideal for major renovations and investing to improve the value of the home. They can also be used to build an investment portfolio. 

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