Thinking about renting out your property for the first time? Whether you're considering turning your home into a rental or buying investment real estate, becoming a landlord is a big step. This comprehensive guide explains how to become a landlord in the U.S.—covering everything from choosing the right property and screening tenants to setting rents and getting the right landlord insurance.
We’ve intentionally kept this guide broad and applicable across the U.S., since rental laws and processes can vary significantly by state.
What Is a Landlord?
A landlord is someone who rents out property—such as a house, apartment, or condo—to tenants in exchange for monthly rent. Landlords are responsible for maintaining the property, collecting rent, handling repairs, and complying with local and state rental laws. You can become a landlord by renting out a property you already own or by purchasing real estate specifically for rental income.
In a nutshell, landlords provide a place to live in exchange for payment. However, they also carry legal responsibilities such as making repairs, respecting tenant rights, and providing a habitable living space.
Is Becoming a Landlord Right for You?
Before diving in, ask yourself whether you're ready to take on the responsibilities of managing tenants, maintaining a property, and navigating legal requirements. These responsibilities can differ dramatically depending on where your property is located. For instance, states like New York and Oregon enforce strict tenant protections, which could influence how you manage your property.
On the other hand, if you own property in states like Texas, the laws may be more favorable toward landlords. Evaluate how hands-on you're willing to be, or whether hiring a property manager makes sense.
Understand the Legal Requirements
Rental laws vary from state to state and even between municipalities. Some areas require landlord licenses or registration, while others have rules about how much you can charge for security deposits. In places like Minnesota, landlords are expected to follow formal processes for notices and disclosures. Research your local laws thoroughly before renting out your property.
Choose the Right Property
Whether you’re renting out your current home or buying a new investment, location plays a major role in your success. Properties in growing rental markets—such as North Carolina and South Carolina—can provide more tenant demand and reduce vacancy time.
Evaluate the neighborhood, local job market, school districts, and average rents. These factors all influence how desirable your property will be to prospective tenants.
Set the Right Rent Price
Setting the right rent is critical. Price it too high, and you risk long vacancies; too low, and you leave money on the table. Research similar listings in your area. Keep in mind that areas like Tennessee and Arizona may have lower property taxes, giving you more flexibility on rent pricing while still turning a profit.
Make sure your rent covers expenses like the mortgage, taxes, insurance, and maintenance, while remaining competitive with local market rates.
Screen Tenants Thoroughly
Don’t rush this step. Tenant screening is one of the most important parts of being a landlord. Use reputable tenant screening services to review credit scores, background checks, and eviction histories. Reliable tenants reduce the risk of missed rent payments and expensive evictions.
Also, be sure your screening process complies with Fair Housing laws, which apply nationwide.
Sign a Solid Lease Agreement
A detailed, legally compliant lease protects both you and your tenant. It should cover rent due dates, late fees, maintenance responsibilities, pet policies, and more. For example, New Jersey has state-specific disclosure requirements that must be included in lease agreements.
Using a lease template that aligns with your state’s laws ensures your rental arrangement is enforceable.
Get Landlord Insurance
Homeowners insurance typically doesn’t cover tenant-caused damage or rental income loss. That’s why landlord insurance is critical. It protects your property, covers liability in case someone gets hurt, and may even reimburse lost rental income due to covered damages.
Whether you’re renting in Michigan or New York, this type of coverage is an essential part of your risk management strategy.
Final Thoughts: Start Strong with the Right Knowledge and Protection
Learning how to rent a home and manage tenants takes effort, but with the right approach, it can be a profitable and rewarding experience. As you begin your landlord journey, remember that being informed—and insured—can make all the difference.
Need coverage? Steadily offers landlord insurance designed for first-time landlords. Get a quote today.
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