How do I become a landlord?

Start by confirming the home is legally rentable and physically ready. Check that your mortgage, insurance, and any HOA rules allow a rental. Switch to a landlord policy, since standard homeowner insurance rarely covers tenants.

Handle safety basics before anyone moves in. Test smoke and carbon monoxide detectors, fix anything that could injure a tenant, and document the unit's condition with dated photos. Local licensing or inspection requirements vary by state and city, so check your state landlord-tenant guides and confirm with local counsel.

Price the unit against comparable rentals nearby, not against your mortgage payment. Look at similar bedrooms, square footage, and condition in your area. Overpricing leads to long vacancies, and empty months usually cost more than a modest rent difference.

Write a clear listing with honest photos and a full feature list. Decide your policies up front: pets, smoking, parking, and who pays which utilities. Fair housing law limits how you advertise and who you can reject, so tie every decision to objective criteria.

Never rent on a gut feeling. Collect a written application and run consistent checks on every adult applicant, including credit, background, and eviction history. Verify income and employment, and a common rule of thumb is monthly income of two to three times the rent.

Put the agreement in a written lease that both parties sign. Cover rent amount, due date, deposit terms, maintenance responsibilities, and rules for the unit. Deposit limits and required lease disclosures vary by state, so confirm yours before you sign.

Decide how tenants will pay before move-in day. Online rent collection with automatic reminders beats chasing checks and creates a clean record of every payment. Set a written late fee policy, but remember caps and grace periods vary by location.

Plan for repairs and taxes from the start. Keep a reserve for maintenance, decide how tenants will report problems, and track every dollar of income and expense. Rental income is taxable, and good records make Schedule E filing far easier at year end.