Becoming a landlord for the first time is exciting — but it can also be overwhelming. Before you hand over those keys, here are five essential steps that every new landlord should take.
1. Screen Your Tenants Thoroughly. Never skip the screening process. Run a credit check, verify employment, and call previous landlords. A few hours of due diligence upfront can save you months of headaches later.
2. Get Your Lease Agreement in Writing. A handshake deal is never enough. Use a written lease that clearly outlines rent amount, due date, late fees, pet policy, and maintenance responsibilities.
3. Document the Property Condition Before move-in, walk through the property with your tenant and document everything with photos and a written checklist. This protects your security deposit if there is damage at move-out.
4. Know Your Local Landlord-Tenant Laws. Every state has different rules around security deposits, notice periods, and eviction procedures. Spend an hour researching your state’s laws before you rent.
5. Set Up a Separate Bank Account Keep your rental income completely separate from your personal finances. This makes tax time much easier and keeps your records clean.
6. Set Up a Separate Bank Account to Hold Tennat Escrow Deposits: The account must be separate from personal funds. Does NOT need to be a separate account per tenant. It can be pooled, but must be properly accounted for by tennant.