Steps To Take Before You Rent Out Your Property

Renting out your property includes careful financial planning and legal steps before you are ready to sign a lease agreement with a tenant. There are also several professionals to consult throughout this process, including:

• Your accountant, who can explain financial and tax implications
• City or county employees, who can advise on landlord-tenant rules and processes in your area
• Contractors, who ensure your property meets zoning and building codes
• Your attorney, who can review your lease documents and advise on how to protect your interests and reduce your liability

You should also consider how your rental property will affect neighbors. That includes neighbors inside the building and in the neighborhood, particularly if you won’t be living nearby.

This article outlines the steps to take before you rent out your property. You’ll also find helpful tips to help you run a successful income property business and avoid issues before they arise.

This article will help prepare you to rent out your property, but professional legal advice and business planning are still usually best. A local landlord‑tenant attorney can help ensure you meet state and local requirements and that your lease protects you in a tenant dispute.

Step 1. Prepare the Property

Before you start showing your rental unit to prospective tenants, it’s a good idea to spruce up the property. Conduct a thorough walkthrough of the premises well in advance. This helps ensure compliance with state fair housing laws and gives you a head start on property management.

An inspection checklist can help ensure everything in the property is in working order. On the outside of your unit, consider installing signs or devices that make it clear:

• Soliciting on the property is prohibited.
• Illegal activity on the property is prohibited.
• Loitering on the property is prohibited.

A court, judge, jury, or other adverse party will take more kindly to a responsible landlord. Similarly, a prospective tenant will be happy to see the landlord has installed:

• A security system and good outdoor lighting
• Working smoke detectors and carbon monoxide detectors
• Fire extinguishers, light fixtures, and other safety devices

In addition, a smart landlord should make arrangements for:

• Maintenance workers to have access to the property when necessary
• The post office letter carrier to have a key to the property

Tip: Find a Good Contractor

There are other ways to prepare your rental property. Consider working with a trusted contractor to ensure the property meets all local building safety codes. If the property is in good shape before a tenant’s move-in day, you’ll be less likely to run into issues with your tenant about habitability or the unit’s general condition.

A smart property owner learns in advance which laws apply to their rental properties. An attorney can explain how state and local laws apply to your real estate business and advise on how to protect your interests. Find local legal help.

Step 2. Write the Lease Agreement

A strong rental agreement is key to any healthy tenancy. Familiarize yourself with the local city, county, and state laws that govern your rental property. You will need to customize your lease agreement to accommodate local regulations.

For example, some states may require lead paint or radon disclosures to be included in or alongside the lease contract. Other states might limit the dollar amount of a tenant’s security deposit in relation to the first month’s rent.

Tip: Use This Checklist To Know What To Include in Your Lease

Here is an example checklist of standard items to include in your lease. Ideally, the lease:

• Provides the timeline and mechanism for each month’s rent payments
• Designates which party is responsible for mowing the lawn, raking leaves, and other yard maintenance
• Designates which party is responsible for shoveling snow and sanding/salting icy steps and walks
• States the maximum number of people allowed to live in the rental property
• Prohibits tenants from operating a business on the premises. This is especially important if the business would bring customers to the property.
• Places responsibility on the tenant to repair appliances or devices. This includes the garbage disposal or HVAC system unless local law requires the landlord to address those issues.

You can add many more details to your rental agreement. You may want to address pet ownership, noise regulations, and renewal terms.

You may also write in a requirement that the tenant must obtain renters insurance. This will help protect you from liability in case of property theft, third-party injuries, or other accidents that could occur during a tenancy.

You should also include language in the lease that obligates the tenant to follow the law. While it may seem obvious that everyone should obey the law, imposing this requirement on your tenant can help. For example, if a tenant breaks the law, your lease may empower you to proceed with eviction. This could be true even if the violation didn’t damage the rental unit.

3. Screen Potential Tenants

Thoroughly screen and vet prospective tenants before you give them a lease to sign. You should obtain:

• Detailed contact information about prospective renters, going beyond just a tenant’s name
• Background checks and credit checks for all adults who intend to be renters
• Adverse credit report information, such as prior evictions, liens, judgments, or bankruptcies

Ideally, you keep a consistent flow of rental income. But you also must ensure tenants won’t break the law or destroy your property. In that spirit, it’ll be a good idea for the conversation to cover topics indicating that:

• Tenants have agreed to abide by local laws regarding noise, nuisance, and quiet enjoyment of surrounding property.
• Tenants have agreed to follow street parking regulations, such as maximum parking time and rules governing plowing or emergency clearance.
• Tenants have agreed to abide by all other laws, including criminal laws prohibiting illegal behavior.
• The landlord has prohibited tenants from keeping junk, such as broken-down cars, on the property.
• The landlord has installed a bike stand for the tenants’ use.
• The rental property has sufficient designated parking space, and tenants know to avoid parking in neighboring lots.
• Tenants know to pick up after their dogs and not to allow dogs or cats in neighboring yards.
• Tenants know to respect other neighbors and follow any applicable HOA rules, including CC&Rs.
• Tenants have obtained any necessary moving-day permits or authorization, such as a permit for a moving truck.

Tip: Avoid Potentially Discriminatory Questions

Beyond routine application paperwork, it’s also helpful to open up dialogue. Get to know your prospective tenants and start a conversation to make sure they’re a good fit.

However, be sure you don’t ask illegal questions that may violate the Fair Housing Act, like asking about national origin, religion, gender identity, familial status, or disability. These topics are protected under federal law, and any screening questions that touch on them—even casually—can be considered discriminatory. 

4. Complete a Move-In Inspection

You can take steps to prepare prospective tenants before they move in. A thorough move-in inspection of the unit protects both the landlord and the tenant. Use photos and videos to document your walkthrough as you show the property’s condition to your prospective tenant.

Later, if property damage goes beyond normal wear, you will have proof of the unit’s condition before your tenant moved in. Accordingly, when the tenant moves in, you’ll have already secured your position with the move-in checklist above. When they move out, you’ll know what problems were present before the lease and what issues your tenant may have caused during their tenancy.

Need Help With Your Lease or Rental Property? Contact a Lawyer

Real estate investors and first-time landlords might need more than just a tenant checklist to keep them going. Lease terms, tenants’ rights, and tenant screening aren’t easy to navigate. Before sending out rental applications to potential tenants, review this checklist with a real estate attorney or landlord-tenant lawyer. They can give you invaluable legal advice that will help you get off to a strong start.

FindLaw’s directory of landlord-tenant lawyers can connect you with qualified legal help near you. Because your state’s laws are relevant, your attorney should be licensed in the state where the rental property is. Enter your city or ZIP code for a list of legal professionals in your area. Your search results will also show important details about prospective attorneys, like ratings, languages spoken, and whether they offer free consultations.