When you are actively seeking work, unemployment benefits are designed to partially replace the income you used to receive from a job. While you receive unemployment, your state's unemployment office requires you to report any income you receive and may reduce your unemployment benefits because of that income. In general, your rental income will not affect your unemployment benefits unless you rent properties as a form of employment.
In general, collecting rent on a single property you own and rent to a tenant will not affect your unemployment claim. For example, both the Minnesota and Ohio unemployment offices specifically mention rental income from a property that you own as income that does not affect your unemployment benefits. This is because the income is not due to your work, but rather is because of your investment. In addition, much of the income goes back into maintaining the property, paying taxes on it and paying the mortgage if you have one.
If you own and rent out multiple properties as a side business, this might interfere with your unemployment claim. For example, in Minnesota, money from renting properties as your primary occupation needs to be reported to the unemployment office. However, in most cases, you can deduct expenses and report only your income from rental, not your gross receipts of rent payments. In addition, depending on the amount of rental income you receive, you may still be eligible for partial unemployment benefits.
Ability to Work
If you spend so much time managing your rental property or properties that you are not available or able to work full time, this can also interfere with your ability to receive unemployment benefits. In order to be eligible for any benefits at all, you must be available to start working if you are offered a job. Therefore, your state's unemployment office may ask you to prove that you can manage your properties in the evenings and weekends or during hours that are not usual work hours in your field.
When you apply for and establish your unemployment claim, discuss your rental income with someone at your state's unemployment office. Even if your income is minimal, some states may require you to report it so they can evaluate whether your role as a landlord is a form of self-employment that will affect your benefits. Failure to report income that your state requires you to report can result in criminal prosecution.