1. Buy a multi-family house.
Live in the unit that would bring in the lowest rental income, and let your tenants pay your mortgage, insurance, taxes, and maintenance while you build equity.
This is especially lucrative if you are able to do a most of the small repairs yourself or you have a trusted handyman to do them for you. Where landlords tend to get into trouble is either by overpaying for repairs or renting to nightmare tenants.
This is also a great way to be able to afford more house. Banks tend to factor in rental income when determining how much mortgage you can afford.
And, in the USA, if you purchase a 2-4 unit house you can qualify for the same programs as a single family home.
2. Rent a room in your house.
You can rent just a room on a short or long term basis. Tenants share a bathroom, kitchen, and common areas.
If you are a very private person, this would not be ideal, but if you like meeting new people and having others around, this could be a great way to do so and make some money.
3. Rent your house a la Air BnB or similar.
This is a great option if you live in a popular destination area. During peak times I know some homeowners actually choose to live in a hotel or apartment because the rental income is so enticing! Remember to include a charge for cleaning fees.
A few things to keep in mind:
1. Check with local ordinances and your insurance company before starting. Make sure you are protected and legal. You may also want to consider consulting an attorney to ensure your lease agreements are in order.
2. Check the local codes regarding security deposits and how much rent you can collect up front. Most areas allow security deposit and first and last months’ rents. Some vary from this. Some require you put the security deposit in an interest bearing account, others do not. Know the rules.
3. The US Tax Code loves rental real estate. As soon as you become a landlord you open the door for all sorts of tax savings. From depreciation to write offs, you will be amazed at the perks!
4. Did I mention protect yourself? Your safety and security come first. If you are at all concerned with your safety, listen to your gut. These options are not for everyone. You know you best. You may be able to work around these concerns by hiring a property manager or contracting with a larger agency or network. Whatever you do, make sure it works for you.