From Home Sweet Home to Smart Investment: How to Turn Your Primary Residence into a Rental

Thinking about turning your primary residence into a rental? You're not alone! In Austin’s competitive real estate market, more and more homeowners are making the shift from living in their homes to renting them out — and for good reason.

Whether you're relocating, upgrading, or just testing the waters as a new investor, transitioning your home into a rental can be a smart financial move. But it also comes with a few important considerations.

Let’s walk through why people make this switch, what the pros and cons are, and how to set yourself up for success — with or without a tenant already in mind.

Why Turn Your Primary Home Into A Rental?

Here are a few common reasons people choose to rent out their current home:

• You're relocating but want to keep the property. Maybe you're moving for a job or relationship, but you're not ready to sell — or maybe you believe in the long-term value of Austin real estate.

• You’ve outgrown your space. Your home has served you well, but you need something bigger or in a different neighborhood. Rather than sell, you hold onto it as an investment.

• You want to start building wealth. Renting out your home is often the first step toward real estate investing — and it can help you build equity and generate passive income.

• Market timing. Sometimes it’s not the right time to sell. By renting out your home, you can wait for a stronger seller’s market down the road.

Pros and Cons of Renting Out Your Home

The Flip Side:

• Landlord responsibilities: You’ll need to handle maintenance, repairs, and tenant issues — or pay someone to do it.

• Vacancy risk: There may be times when your property sits empty.

• Financing complications: If you plan to buy another property, having an existing mortgage can impact your loan eligibility.

• Property wear and tear: Rentals experience more use — and sometimes, less careful use.

The Upside:

• Steady rental income: Help offset your mortgage (or cover it entirely) with rent payments.

• Long-term equity growth: Hang onto your home and potentially benefit from rising property values in Central Austin.

• Tax perks: You may qualify for deductions related to depreciation, repairs, and property management.
  
  

How to Navigate the Transition

Here’s how to turn your home into a rental the right way:

1. Understand Local Regulations

In Austin, short-term rentals (under 30 days) must be licensed and follow city-specific rules. For long-term rentals (30+ days), homeowners are not required to register the property. It’s still smart to understand any applicable local and HOA regulations, and to speak with a real estate professional who’s familiar with the area.

2. Run the Numbers

Be honest with yourself: will the rent you charge cover your mortgage, taxes, insurance, and maintenance? What happens if you need to make a major repair or the home sits empty for a month?

3. Prep the Property

• Make necessary repairs and updates

• Clean thoroughly (consider professional cleaning)

• Decide what appliances or furnishings will stay

• Improve curb appeal — first impressions matter to renters, too.

4. Decide on Management

Will you manage the property yourself or hire a professional? Property managers typically charge 8–12% of monthly rent but can save you time and stress — especially if you’re out of town.

5. Work with a Real Estate Agent

Even for rentals, having an agent on your side makes a big difference. Here’s how I can help:

• Price it right: I’ll run a comparative market analysis to help you set a competitive rent.

• Market the property: Get your listing in front of qualified renters, fast.

• Find reliable tenants: I can help screen applications and guide you through the leasing process.

• Advise on improvements: I’ll recommend updates that boost appeal and ROI — without overspending.

Final Thoughts

Turning your home into a rental can be a savvy move — but it’s not without its challenges. From pricing to prep to paperwork, having the right support makes all the difference.

If you’re curious about making the transition from homeowner to landlord in Central Austin, I’d love to help you figure out what’s next.

Eleanore Bacon

Realtor at Open House Austin

I love helping people feel at home in this city, whether they’re finding the right rental or preparing for their next big move. I’m here to make the process clear, comfortable, and tailored to you. If you have questions about leasing, buying, or selling, I’d love to connect!