If you’ve been searching for your next rental, you’ve likely encountered the terms “privately owned” and “for rent by owner.” With this type of rental, you primarily engage with the owner of the property, who is also the landlord, versus a property management team or leasing agent.
As with all rentals, there are important things to consider before renting a house from a private landlord. Below, we cover those specifics, the process of finding prime options, and everything you need for your rental search.
What are for-rent-by-owner houses?
For-rent-by-owner houses are properties that the owner privately rents out themselves rather than going through a property management company. In this type of rental, you won’t need to talk to a leasing agent during the lease term. Instead, you will have direct access to the landlord for help with maintenance or general issues.
These types of rentals often offer more flexibility in the lease duration and sometimes rent price, since you’re dealing directly with the property owner.
What to prepare before looking for rental houses
Before you begin searching for any rental house from a private landlord or otherwise, you’ll need to have your budget and application documents ready. Here’s more information on how to prepare for the home search:
1. Budget
Knowing how much you can afford in rent every month is essential. There are two main formulas you can use to determine your budget:
- Ensure your rent isn’t more than a fourth of your take-home pay. So, if you earn $5,000 a month, your monthly rent shouldn’t be higher than $1,250. Use the following formula: monthly take-home pay ÷ 4 = maximum monthly rent amount.
- Ensure your yearly gross salary (before taxes are taken out) is at least 40 times your monthly rent. So, if your annual household salary is $100,000, your rent shouldn’t be more than $2,500 monthly. Use the following formula: yearly household salary ÷ 40 = maximum monthly rent amount.
Remember to factor in other expenses, too, including your security deposit, moving costs, and utilities. After determining your budget, look at the current rental market to better understand how much you can expect to pay in different areas and for different houses.
2. Good credit score
Generally, most landlords require a credit score of at least 650 to be considered during the application process. If you don’t know your score, you can create an Avail Renter Profile and add a TransUnion credit report to find out what your score is. If your credit score is below 650, you have a few options:
- Improve your credit score:Make sure you pay all your bills on time, pay off your credit cards, and only apply for new credit when needed.
- Get a co-signer: You can get someone to sign with you so your landlord has a sense of security, since they can fall back on your co-signer if you don’t pay.
- Provide strong proof of income:Give your potential landlord all the documentation needed to verify you have the financial means to rent their property. These include bank statements, pay stubs, and tax documents.
- Offer advanced payments:You can offer to pay a few months’ rent in advance. The more you can pay, the better. However, two to three months’ worth of rent should do the trick.
3. List of must-haves
Create a list of non-negotiables, which are things you’re unwilling to compromise. Examples of these include:
- The neighborhood:Perhaps you’d like to be close to schools, grocery stores, or your place of work. You might also want to consider the crime rate in the area to ensure you and your family feel safe.
- Amenities:Are there specific amenities you must have? For example, do you want in-house laundry, a big backyard for your pet, or a two-car garage?
- House size:Do you need multiple bedrooms for your family? Or will a smaller home work?
You can use your list of must-haves to filter your options once you begin searching for a rental.
4. Application documents
You need to have all your application documents ready, so you can provide them to the landlord with your application. These include the following:
- Employer information or verification
- Recent pay stubs
- Bank statements or proof of equity
- Rental history
- References from past landlords or employers to prove your reliability
- Information on your pets (such as their type, breed, and size)
- Proof of utility transfer
- Post-dated checks (these help indicate your readiness to rent, and they’re also helpful if you’re trying to win a bidding war). Check your credit report in advance by creating an Avail Renter Profile.
How to find houses for rent with private landlords
Generally, the process for finding rentals with private landlords is the same as it would be for finding rentals through a leasing company. Here are the steps renters should take:
1. Start rental hunting at the right time
The best time to start your rental search is generally 60 days before your current lease expires. Considering most landlords are unwilling to hold a rental for more than 30 days, it’s best to start within the 60-day window to avoid starting too early or too late. This will also give you time to determine what neighborhood you want to live in, your budget, and the amenities you want.
2. Look for rentals on a listing app
After determining your budget and ideal neighborhood, begin looking for rental properties on a reputable rental app. With Realtor.com®, you can type in the location or neighborhood you’d like to peruse for available options. From there, you can use the Real View map, which allows you to filter by:
- Property type
- Price
- Number of bedrooms and bathrooms
- Move-in date
- Pet-friendliness
- Listings still accepting applications
You’ll even have advanced filtering options, such as community features and home size.
3. Beware of scams
While you can look for private listings on platforms such as Facebook housing groups or Craigslist, doing this is risky. On these platforms, it’s far likelier that you’ll run into fraudsters who run fake ads and then ask you for money to view the listing or a “security deposit” to secure it—before disappearing.
You might also run into “landlords” who are suspiciously unavailable and will try to put off any in-person meeting you request. Even if the landlord is willing to meet you, this isn’t enough proof that the listing is legitimate. You need to see the property for yourself first before paying anything.
4. Create a shortlist of houses
After reviewing your options, you can shortlist the best properties. From there, schedule in-person viewings with the landlords. During this time, you can ask important questions, such as:
- How do maintenance requests work? You’ll want to learn about the maintenance policies and whether you can contact the landlord directly.
- What is the pet policy? Even if the listing stated that the property is “pet-friendly,” it’s best to double-check. Remember, emotional support animals and service dogs are excluded from pet policies.
- What are the lease-length options? There are four main types of rental agreements. Since you’re renting a house, your lease agreement will likely be for a more extended period, such as 12 months.
- Are there any house rules? Find out if there’s anything you’re not allowed to do. For example, are you permitted to paint? Can you host parties at the property?
5. Apply for the rental
Once you’ve found your ideal rental, the next step is submitting a rental application. Generally, the rental application process with independent landlords is similar to what you’ll do with property management companies. However, it can differ slightly depending on the landlord.
Most landlords will request supporting documents, such as pay stubs, that prove you can afford the rent. You can increase your chances of getting approved as a tenant by:
- Including a cover letter that explains why you love the house and why you’ll be a good renter.
- Improving your credit score in advance so you won’t require other solutions, such as a co-signer.
- Providing references from previous landlords or others who can vouch that you’re a respectful and responsible individual.
Houses for rent by private landlords are easier to find than you think. But before starting your search, determine your budget, ensure you have a good credit score, and create that non-negotiables list. Then, visit Realtor.com to find available listings near you.
