10 Steps to Renting Out a House for the First Time

If a property owner is looking for additional income, renting out a house can be an attractive option. However, the property leasing business can be difficult to master without proper research and expert guidance. The process of renting out a house for the first time can be overwhelming, so it helps to know what steps to take.

How To Rent Out a House for the First Time

Many property owners consider renting their houses. Perhaps they would like to gain an additional source of income or reduce their debt. Renting can be an alternative to selling until the housing market improves or a form of relief during trying economic times. Whatever the reason, this option can be quite a headache unless an effective plan is put into place that details how to rent out your house. You could rent out your home for various reasons, and a home can be leased for residential or commercial purposes. 

In addition, if you live in or around popular tourist spots, you could consider renting your property as a vacation home during peak times. Before signing up for this, however, become familiar with the laws and requirements of any rental group. 

You will also need to decide if you want to use a real estate agent or lease your home privately. You must consider the rent, tenant type, and marketing for the property. As you are making these decisions, also consider using the following guide to help you with the most important steps to renting out a house.

Common Mistakes of First-Time Landlords

When venturing into the home renting business for the first time, avoid the following pitfalls:

  • Failing to recruit a property manager;
  • Failing to create guidelines for screening tenants;
  • Neglecting to cover yourself;
  • Failing to document the condition of the property;
  • Failing to connect the tenant with maintenance providers.

Failing to recruit a property manager

Property managers come in handy when you do not live near the rental property. They can deal with maintenance, repairs, and other tenant-related queries or concerns. Property managers generally take seven to ten percent off the rental income and a bonus when they sign a new tenant. The property manager’s services and the peace of mind that comes with them offset these costs. The property manager deals with communicating with the tenants about maintenance, evictions, rent increases, and the like.

Failing to create guidelines for screening tenants

Equal housing legislation dictates that a landlord use the same criteria equally and unbiasedly when considering all potential tenants. Carefully write your guidelines regarding pets, credit scores, job stability, and monthly income. Strictly formulating and following these guidelines will protect you in the long run.

Neglecting to cover yourself

You will want to be familiar with how adequate your landlord insurance is to protect you against the potential risks associated with renting. Another option to add a layer of protection is transferring your house to a limited liability company (LLC). By doing so, you may be better able to ensure that you get the correct kind and amount of insurance coverage. There are some cons to establishing an LLC, such as different tax obligations, but an experienced lawyer can help you better understand the advantages and disadvantages and offer additional advice for protecting yourself and your asset.

Failing to document the condition of the property

Be sure to create a report that specifies the house’s condition in detail before the tenant moves in and again immediately after the tenant leaves the property. If you require your tenant to pay for any damages to the property, you will be more successful if you have carefully recorded the house’s initial condition as well as the damages left by the tenant. The report and pictures can serve as evidence if a lawsuit must be filed.

Failing to connect the tenant with maintenance providers

Establish connections with landscapers, electricians, plumbers, chimney sweeps, etc. Inform the tenant from the start how to reach out to you or who to reach out to if something goes wrong.

Ten Steps for Renting Out Your Home

The following steps for renting out your home will help to set you up for success as a landlord.

1. Make sure you are familiar with the rules for renting out a house

When you own a rental house, your rights are not absolute. To safeguard yourself, you must know the legal consequences of being a landlord. Landlords cannot prefer or refuse tenants based on color, ethnicity, disability, beliefs, family status, or gender. The rental house must be livable and secure, and the landlord could be held liable for accidents caused by safety oversights.

There are laws that dictate rental rates, evictions, and service animals. These laws must be recognized and adhered to. Failing to familiarize yourself with the applicable local regulations, federal laws, and state Fair Housing legislation could be detrimental when leasing a house for the first time. Carefully study all relevant state and local laws. It is also advisable to seek legal advice from a property lawyer.

2. Maintain the rental property to the same standard as the tenant you want to attract

Make sure that you clean, repaint, and attend to all the other necessary repairs before showing the property to new potential tenants. The home can be decorated (staged) with furniture and decor so that interested people can picture themselves living in that space. Additionally, you can increase the property’s value with flowers, plants, and manicured lawns.

3. Price your house right

Your property should have an appropriate rent amount. Consider comparable rentals in the area, and refrain from setting your rent based solely on what you think the property is worth.

4. Consider your lease agreement

After you find a suitable tenant, you will need to include all details in a lease agreement—a written document between the landlord and the tenant. This document specifies the terms of the rent agreement and is assented to by both sides with signatures and dates. The 100% safe and legally binding rent agreement form stipulates the entitlements and obligations of both parties for the duration of the contract.

If there is a rental dispute, this contract will provide legal protection. It can be challenging to settle rental disputes without a written lease contract, and you may also benefit from seeking advice from a real estate attorney to ensure that the document is legally binding.

5. Keep proper financial records

It can be challenging to monitor your rental property’s success without adequate financial records and documents. Record all expenses related to the property as well as property taxes. Important paperwork can be backed up in the Cloud, keeping necessary documents safe in case of disputes.

6. Ensure that rent stays up to date

When collecting monthly rent and late payment penalty fees, understand that tenants might encounter financial hardships now and then. In these cases, the tenant must liaise with you and indicate how and when he or she will pay the rent. You must not allow tenants to miss or stop rent payments without speaking to you. If this happens, consult with your lawyer about whether to commence with eviction proceedings.

7. Charge a security deposit

A security deposit safeguards you as the landlord in case rent is not paid or the tenant does not adhere to certain obligations. If the tenant damages the rental house or neglects his or her duties, those amounts will be offset against the rental deposit. Charging a security deposit can minimize disputes about the initial condition of the property. The laws governing security deposits differ among states, so keep abreast of the security deposit regulations in your state.

8. Keep a reserve fund

A prudent approach to maintaining rental homes is to keep an adequate reserve fund, which should be sufficient for all expected and unplanned maintenance expenses. A landlord must maintain the condition of the property to avoid negative consequences that might arise and to prevent inconvenience to the occupants.

9. Do not spend more than you will earn

Renovations should result in a higher rental income or lower monthly disbursements. Do not splurge on the property unnecessarily. Make repairs as needed to maintain the condition and safety of the property.

10. Create an effective marketing plan for how to rent out property

You must have a sound marketing strategy so your property will not remain unoccupied for a long time between tenants. A good marketing plan will entice many potential renters, increasing the chances of someone choosing to rent the property. Take or invest in good photographs and consider purchasing lucrative advertising packages on popular property sites. 

Do I Need an Attorney To Rent Out a House? 

An attorney can assist with understanding and applying the relevant landlord-tenant law, which differs across state lines. The attorney can also advise about applicable community laws and regulations on rental properties. 

An attorney can facilitate drafting a legally binding and enforceable lease that adheres to the applicable rules and regulations of your area. He or she can also advise about establishing appropriate property rules and emergency contacts. In the event of evictions or other rental disputes, a lawyer can help to ensure that all matters are dealt with under the relevant laws.


Navigating the rental property business can be challenging. You will need to ensure that you have an action plan to circumvent possible problems that might arise. Always ensure that you have reliable maintenance contractors and other experts in your arsenal. Lastly, consider leaning on a knowledgeable property lawyer throughout the entire process.

Article by James Finsweet

James Finsweet is a Head of legal department in LawBrother Ltd. At Lawrina, James contributes his experience in law practice and shares opinions on law regulations and news.

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