First-Time Landlord Checklist: What to Do Before You Rent Out Your Property

A first-time landlord should work through seven steps before handing over the keys: make sure the property is ready and legal to rent, switch to landlord insurance, set the rent, write screening criteria that follow fair housing law, sign a written lease with the required disclosures, collect the deposit within your state's limit, and set up records for taxes from day one. Watch two kinds of rules: federal rules that apply everywhere, such as lead paint disclosure for homes built before 1978, and state rules, such as deposit limits, that change from one state to the next. Use the checklist below in order.

Step 1: Make sure the property is ready to rent

Before you list, walk the property as a tenant would. Fix safety items first: smoke and carbon monoxide alarms, locks, stairs and railings, heating, hot water and electrical problems. Then check whether your city requires rental registration, a rental license or an inspection. Your city or county housing office website is the place to confirm this for your address.

If you bought the property recently, the rental property due diligence checklist covers inspections, permits and environmental tests that also matter once you rent it out.

Step 2: Switch to landlord insurance

A standard homeowners policy is built for a home you live in. Once a tenant moves in, you need a landlord policy. According to Policygenius, the main differences are:

Expect to pay more. Policygenius cites the Insurance Information Institute: landlord insurance is on average 25% more expensive than homeowners insurance. Your tenant's furniture and electronics are not covered by your policy; Policygenius notes that tenants insure their own belongings with renters insurance. Read your mortgage terms too, in case they say anything about occupancy.

Step 3: Set the rent and run the numbers

Price the rent from comparable listings nearby: same size, condition and amenities, listed recently. Then check that the rent covers the real costs: mortgage, taxes, insurance, repairs, vacancy and, if you hire one, a manager. Our guide on how much property managers charge breaks down management fees, and how to analyze a rental property walks through the full cash flow math.

Step 4: Write screening criteria that follow fair housing law

The federal Fair Housing Act prohibits housing discrimination because of race, color, national origin, religion, sex, familial status or disability. State and local laws may protect more groups, so check your local rules as well.

The law also covers your ad. HUD states that discriminatory housing advertisements are illegal, and gives "no children" as an example of a phrase that may violate the Act. Describe the property, not the tenant you imagine.

Write your criteria down before the first showing (for example, income, rental history and credit standards) and apply the same criteria to every applicant in the same order.

If you use a credit or background report, the Fair Credit Reporting Act applies. The FTC's guide for landlords says you need a permissible purpose and must certify you will use the report only for housing purposes. If you reject an applicant, ask for a co-signer, or raise the rent or deposit based even partly on that report, you must give an adverse action notice. It must include the name, address and phone number of the reporting company, a statement that the company did not make the decision, and the applicant's right to dispute the report and get a free copy within 60 days. When you are done, securely dispose of the report.

Step 5: Sign a written lease with the required disclosures

Use a written lease that fits your state's law, and check whether your state publishes a standard form. At minimum it should cover rent, due date and late fee, the deposit, lease length, who pays which utilities, maintenance duties, entry notice, pets and smoking.

Lead paint (homes built before 1978). Under the federal disclosure rule, as the EPA explains, you must:

• Give the tenant the EPA pamphlet "Protect Your Family From Lead in Your Home"
• Disclose any lead-based paint or hazards you know about, and share any reports you have
• Include a Lead Warning Statement in the lease
• Keep a signed copy of the disclosures for three years after the lease begins

Your state or city may require other disclosures, such as mold, bed bugs, flood zone or who to contact for repairs.

Step 6: Collect the deposit the legal way

Security deposit rules are set by states, and they differ on the maximum amount, where the money is held, and how fast it must be returned. California is a good example of how fast these rules change. Under Assembly Bill 12, since July 1, 2024 most California landlords can charge a deposit of no more than one month's rent, furnished or unfurnished. Owners with no more than two rental properties and no more than four units in total can still collect up to two months, but not from a service member tenant. Look up your own state's rule before you quote a deposit.

At move-in, do a written walkthrough with dated photos of every room, signed by both of you. It is your best evidence when the tenant moves out.

Step 7: Set up your records and taxes from day one

Rental income is taxable. The IRS says rent you receive, including the fair market value of services, is taxable to you as rental income, generally reported on Schedule E (Form 1040). Two details catch new landlords:

• Advance rent counts as income in the year you receive it.
• A deposit you may have to return is not income, but a deposit that will be used as the last month's rent is advance rent, taxable when you receive it.

Keep a separate bank account for the property, save every receipt, and talk to a tax professional about depreciation and deductible expenses.

First-time landlord checklist

Before listing

• Safety items fixed: alarms, locks, heat, hot water, electrical
• City registration, license or inspection confirmed
• Landlord insurance in place, mortgage terms checked
• Rent set from recent comparable listings, costs checked

Screening

• Written criteria, applied to every applicant
• Ad describes the property, not the ideal tenant
• Reports used only for housing purposes, disposed of securely
• Adverse action notice ready if you deny based on a report

Lease and move-in

• State-compliant written lease signed
• Lead disclosure and EPA pamphlet (pre-1978 homes), copy kept 3 years
• Deposit within your state's limit, held as the state requires
• Move-in walkthrough with dated photos, signed

Ongoing

• Separate bank account and receipt folder
• Rent and deposit records ready for Schedule E
• Repair request process and an emergency contact for the tenant

Do it with Blurben

Blurben is an AI real-estate companion on WhatsApp and iMessage. It helps landlords from finding the property, through checking the rent and the lease, to connecting with local services like inspectors, insurance brokers and property managers. Send it your address and ask what comparable homes rent for, or which steps on this list apply in your state. Ask Blurben on WhatsApp or iMessage at any step.

This article is general information, not legal, tax or financial advice. Landlord rules vary by state and city; check them or speak with a local professional before you rent.