A First-Time Landlord's Guide to Renting
A step-by-step look at becoming a landlord and managing a rental property
Last Updated: April 17, 2025
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Key Takeaways:
- It’s important to familiarize yourself with state and city laws before renting your property.
- Prepare your rental to meet safety standards set by state laws.
- Using a Rental Agreement provides evidence of the terms and ensures there are no miscommunications.
Table of Contents
- 1. Know your state and city laws
- 2. Determine your business structure
- 3. Set a rental price
- 4. Prepare your rental to be safe and habitable
- 5. Secure insurance
- 6. Advertise the property
- 7. Find and vet tenants
- 8. Create a Lease Agreement
- 9. Enforce tenant payment
- 10. Complete a move-in checklist
- 11. Familiarize yourself with notice and eviction laws
- Create a Positive Rental Experience
Renting out your property can be a great way to earn passive income and build equity. However, you should take some necessary steps before starting your journey as a landlord. This checklist will guide new landlords entering the rental market for the first time.
1. Know your state and city laws
Each state and city has its own set of laws to govern rental properties and landlord-tenant relationships. Some important information you’ll want to familiarize yourself with before renting your property out is:
Zoning laws
Cities enforce zoning laws to separate residential and commercial areas. This ensures that each zone can operate efficiently and safely with minimal noise pollution and household disruption. Zoning laws outline what kind of development is allowed in each community.
Before advertising your home, investigate local zoning laws to ensure you can rent a property there.
If you’re considering hosting short-term rentals through platforms such as Airbnb or VRBO, you must also check your state and city laws to ensure your jurisdiction allows these types of rentals.
State landlord-tenant laws
Property rental creates a business relationship between a tenant and a landlord. To govern this, states and cities outline regulations and responsibilities for each party, referred to as landlord-tenant laws.
Some questions to answer while researching your state's landlord-tenant laws include:
- Are rental licenses required to be a landlord?
- What are the standards and requirements for property maintenance?
- Are there requirements for tenant screenings?
- Are there security deposit requirements?
- Is there rent control?
- How do rent increases work?
- What are the Notice of Entry laws?
- How does the eviction process work?
We’ve created a convenient list of the top 6 landlord-friendly states due to favorable landlord laws, including a fast eviction process, no deposit limits or rent control, minimal notice requirements, and expanded tenant rights.
| If you want to rent out a room or basement in your house, check out our guide to “Setting Up a Successful Rental Suite.” |
2. Determine your business structure
There are many ways to structure your real estate business, such as a Limited Liability Company (LLC), sole proprietor, corporation, or partnership. The best system for you will depend on several factors, such as whether you intend to manage several rental properties and how you’d like to structure your taxes at the end of the year.
Operating as a sole proprietor is usually sufficient for landlords with one property, but it leaves you personally liable for any debts or legal issues related to your rental property.
For those who want to scale their business, consider creating an LLC or corporation. Forming an LLC or corporation protects your personal assets from business assets, but it requires more paperwork and complicates filing taxes.
Read more on why an LLC or corporation may offer more long-term benefits in “How to Structure a Real Estate Business.”
3. Set a rental price
You must decide on a rental price before you list your property and start looking for tenants. The price should reflect the monthly mortgage, condo, or homeowners association (HOA) fees, local demand, and what the rental market supports. If the rental market is scarce, you’ll likely be able to increase the price of your rental.
You will also need to determine if your rental price includes utilities or if the tenant will be responsible for their own utility bills. When you create the lease agreement, you will need to list any price you decide on and the allowed payment method.
4. Prepare your rental to be safe and habitable
Some tasks need to be completed before renting out your property, such as ensuring the property is safe for living. State housing codes require you to maintain your rental property to a minimum standard, and it’s best to learn these laws before your Rental Agreement begins.
Some tasks you can do to get your property rent-ready include:
- Clean each room thoroughly, including hard-to-reach spaces, such as cabinets and other storage areas
- Check all appliances to make sure they work, including the oven, dishwasher, and washer or dryer
- Test smoke detectors and carbon monoxide detectors
- Hire a professional to check that all electricity, heating, HVAC, and plumbing systems are working properly
- Ensure the doors and walls are in good condition
- Repair any problems, such as holes, water leaks, and pests
- Ensure that doors, gates, and windows have working locks
- If you have steps or stairs in the unit, ensure they are strong and safe to use
- Landscape front and back yards and gardens
- Give the walls a facelift with a fresh coat of paint
- Replace or clean flooring
- Upgrade fixtures and/or window treatments
- Eliminate any bad odors
5. Secure insurance
Insurance is one of the most critical ways to protect your assets. While most laws do not state what policy you need, getting landlord insurance is a good idea. A landlord insurance policy may cover property damage, liability, and loss of income if your home is uninhabitable due to a covered peril. Some insurance companies will deny your claim if you only have basic homeowners insurance and the property is damaged by full-time tenants.
You may want to consider requiring your tenant to have renter’s insurance as well. While landlord’s insurance covers your home and assets, your tenant is unprotected. Renter’s insurance will cover their personal belongings in the event of theft, damage, or natural disaster.
6. Advertise the property
Once the property is safe and insured, you can begin advertising it through online classified ads, university housing boards, social media, or any other forum you’d like. Attach pictures of the rental space so the potential tenant can clearly see the property.
Your ad should include:
- Your rental price and whether it includes utilities
- The square footage of your property
- What you are charging as a security deposit (usually equal to one month’s rent)
- Availability and length of the lease term
- Whether you will allow smoking or pets
- If there are any additional incentives, such as parking or cable
- Information about the neighborhood, surrounding areas, and amenities
- How you wish to be contacted
7. Find and vet tenants
Thoroughly screening and vetting applicants is essential to finding a reliable tenant. A Rental Application can collect important details to help you narrow down potential renters. These applications request information such as their credit score, employment status, and references. Landlords can also rely on tenant screening software to help streamline the vetting process and ensure they secure a good tenant.
Read our “How to Find and Vet Tenants” guide for a complete step-by-step process for attracting and vetting tenants.
Credit scores can help identify how likely a candidate is to pay their rent responsibly. If you want to rent to someone with poor credit, consider adding a guarantor to the contract or ask for proof of income.
If you’re considering renting out to a family member, you should still complete a written contract, get landlord’s insurance, and learn your rights and responsibilities. It’s important to consider the impacts and potential tax implications of renting to a family member.
In addition, landlords are bound by specific laws that keep the rental market safe and equitable for everybody. It’s essential that you know these laws and rent your property out accordingly. These laws are:
- The Fair Housing Act prohibits landlords from discriminating against tenants based on religion, sex, race, national origin, familial status, and disability.
- The Americans with Disability Act requires landlords to make reasonable accommodations for any tenants with a disability.
8. Create a Lease Agreement
Relying on a verbal contract can cause strife for both parties, as there is rarely any substantial proof that the agreement has been made if there’s a dispute between the landlord and a tenant. A Lease Agreement is a written contract that acts as a roadmap to guide the relationship between you and your tenant. It sets the rules and expectations for each party and creates a smooth transaction.
Questions to consider while drafting the Lease Agreement include:
- Will you allow pets? Will you charge a pet deposit or fee?
- Will you allow the tenant to make improvements and alterations to the rental property, such as painting the walls?
- Will you allow smoking in the rental property?
- Are home businesses permitted in the rental property? (Often, home businesses are a zoning issue, and depending on the size and income of the business, it may or may not be permitted.)
- Will other occupants be allowed to stay in the rental property?
- Will the tenant be allowed to sublet or assign the Lease Agreement?
LawDepot provides a convenient, step-by-step questionnaire that will tailor your Lease Agreement. Your Lease Agreement should include:
- Property information
- Whether the lease is a fixed term, month-to-month, or year-to-year
- Contact information for each party
- Property restrictions, such as whether smoking or vaping is prohibited
- Payment terms, including rental price, payment method, and when rent is due
- Notice period for rent increases
- Security deposit requirements
- Whether pets are allowed on the property and if a pet deposit is to be enforced
- Responsibilities of the tenant
Both parties must sign and date the Lease Agreement, and the landlord and tenant should each save a copy for their records.
9. Enforce tenant payment
Enforcing rent and security deposit payments is essential to your success as a landlord. Managing money can be challenging, but staying organized can protect you and your property.
Security deposit
A security deposit is collected at the beginning of the rental agreement to ensure that the tenant pays rent according to the Lease Agreement and doesn’t damage the property. Deductions from a tenant’s security deposit depend on your state’s landlord-tenant laws and the terms outlined in the lease. The following may be deducted from the security deposit:
- Repair costs
- Painting costs
- Cleaning costs
- Removal or disposal costs
- Unpaid rent and utilities
A landlord generally cannot use a security deposit to cover reasonable wear and tear. Once the lease ends, the remaining security deposit must be returned to your tenant.
Rent payments
The rental payment method should be communicated in the Lease Agreement and enforced by the landlord. After every payment, it’s best practice to provide your tenant with a Rent Receipt and file a copy for your records.
The best ways to accept rental payments are through certified and trackable systems, such as:
- Cashier’s check or bank draft
- Certified check
- Money order
- Online payment providers, such as PayPal, Cash App, or Venmo
We recommend avoiding using payment systems that are less secure or can reveal your personal banking information, such as:
- Personal check
- Cash
- Direct deposit
10. Complete a move-in checklist
A Residential Rental Inspection Report is one of the most important things to complete before a tenant moves in. This report will protect the landlord and tenant by identifying existing damages or deficiencies before the tenant moves in. This way, the tenant cannot be blamed for any preexisting damage, nor can they claim that damages they caused existed before their tenancy.
You should conduct a Residential Rental Inspection with the tenant present and record any damages or defects. Potential damages could include:
- Damaged windowsills, blinds, doors, or frames
- Scratches or marks on the floors or walls
- Stained carpets
- Holes in the walls
- Broken lights, appliances, fans, locks, or smoke detectors
At the end, both parties should sign the report and keep a copy for their records.
Some additional tasks to complete before or when the tenant moves in include:
- Clean the property
- Provide the tenant with the keys and cut new ones if needed
- Review the terms of the Lease Agreement with the tenant and have both parties sign the contract; if not done so already
- Review the tenant’s maintenance responsibilities, such as lawn care or snow removal
- Collect the first month’s rent, security deposit, and pet deposit or fee (if required)
- Provide the tenant with bylaws and condo rules, if applicable
- Transfer any utilities to the tenant’s name, if applicable
- Determine the preferred method of communication for both parties
11. Familiarize yourself with notice and eviction laws
There are laws that govern notices, evictions, and tenant privacy. Learning how to create and understand tenant and landlord notices, privacy laws, and eviction requirements can prevent legal disputes and conflicts.
Tenant lease notices
Tenant lease notices provide legal communication from the tenant to the landlord in circumstances such as repair, intent to vacate, or termination. You should familiarize yourself with tenant notices and understand your responsibilities if a tenant serves you one of the following notices:
- Notice of Termination: Provides a landlord with notice that a tenant is going to terminate a tenancy.
- Notice of Repair: Notifies a landlord of any repairs that need to be made to the rental property.
- Intent to Vacate: Informs a landlord that a tenant wishes to vacate the rental property once the lease is over.
Landlord lease notices
Landlord lease notices are served to the tenant by the landlord to provide efficient notices of changes or termination. You should take time to familiarize yourself with the following notices so you know how to properly communicate with your tenant in the event of an incident or change to your property:
- Notice to Pay or Quit: Gives notice to a tenant to pay any outstanding rent payments with the option to evict a tenant if they don’t pay.
- Notice of Termination: Notifies a tenant that they won’t be able to renew the tenancy.
- Notice of Lease Violation: This notice warns a tenant of a lease violation. If the tenant doesn’t remedy the situation, the landlord can evict the tenant.
- Notice of Rent Increase: Provides a tenant with notice that their rent will increase.
Tenant privacy
In most states, landlords cannot enter their rental property without giving the tenant proper notice unless it’s for extenuating circumstances. The amount of notice is dictated by each state but usually ranges from 24 to 48 hours. A Notice to Enter is a formal letter that a landlord can deliver to their tenant to communicate their intent to enter the property at a certain time and date.
Eviction laws
Each state enforces eviction laws that outline the circumstances and steps for evicting a tenant. Acceptable reasons for eviction include violating the Lease Agreement, damaging property, failing to pay rent, or breaking the law.
To legally evict a tenant, the landlord must directly serve an Eviction Notice in person or through a process server, a hired third party paid to serve legal documents.
Create a Positive Rental Experience
Staying organized, knowing your legal obligations as a landlord in your state, and filing rental paperwork ensures a positive and smooth tenancy for each party and protects a landlord in case of a dispute or unruly tenant. LawDepot is here to help you with documents and resources to help you run a seamless rental property.
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