What to do before renting out your house

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Renting out a home you used to live in feels like a small step — you already own it, you know every creak. But a rental runs on a different set of rules than a home, and most first-year problems trace back to something skipped before the first tenant moved in. Here's the checklist, in the order we'd do it.

1. Switch your insurance

A standard homeowner's policy assumes you live there. Call your insurer and move to a landlord policy (often called a dwelling or DP-3 policy). It covers the building and your liability as a landlord, and usually lost rent if the home becomes unlivable after a covered event. It typically costs more than homeowner's coverage — build that into your numbers.

Then require your tenant to carry renters insurance. Your policy doesn't cover their belongings, and theirs adds liability coverage that protects you both.

2. Read your mortgage

Many owner-occupied mortgages require you to live in the home for a set period after closing, often the first year. If you're past that, renting is usually fine — but read your loan documents or ask your servicer rather than assume. While you're there, confirm whether your escrow covers insurance, since your policy is about to change.

3. Tell your county about any homestead exemption

If you've been getting a homestead exemption or similar property-tax break for your primary residence — common in Texas and Florida — it generally ends when the home is no longer your primary residence. Contact your county appraisal district or property appraiser. Leaving an exemption in place on a rental can lead to back taxes, penalties, and interest later.

4. Check your HOA and city rules

• HOA: some associations limit rentals, require minimum lease terms, cap how many homes can be rented, or require tenant registration. Read the CC&Rs.
• City: some cities require a rental license, registration, or inspection. A five-minute look at your city's website now beats a fine later.

5. Make it safe — and document it

• Working smoke alarms in every bedroom and on each level, and carbon monoxide alarms if there are gas appliances or an attached garage.
• Secure locks, and a plan to rekey between tenants.
• For homes built before 1978, the federal lead-based paint disclosure form and pamphlet are required before signing.
• Then walk the whole home and photograph every room, every appliance, every scuff. Date the photos. This is your move-in record — and the single most valuable thing you'll have if a deposit is disputed.

6. Set the rent from comparables

Look at what similar homes nearby actually rent for, not what they're listed at for months. Our guide to pricing your rent walks through it. Then run the numbers in the rent or sell calculator with every cost included.

7. Screen fairly and consistently

Write down your criteria before you see a single applicant — income (a common standard is rent around a third of gross income), rental history, and how you'll treat credit and background checks — and apply them the same way to everyone. The federal Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, and disability, and many states and cities add more protected classes.

8. Use a lease written for your state

A generic lease from the internet often misses state-specific requirements — notice periods, deposit rules, required disclosures. Use a lease built for your state, and read every clause you sign. Put the rent, due date, late fee (if any), pet rules, who pays which utilities, and how to request repairs in writing.

9. Decide how you'll handle the deposit

Know your state's rules before you collect a dollar: some states limit the amount, some require a separate account or interest, and all of them set a deadline for returning it. For Texas, Washington, and Florida, see our state guides: Texas, Washington, Florida.

10. Set up a clean way to collect rent

Cash, checks, and a mix of payment apps make year-end a mess and put you and your tenant in the awkward position of chasing and being chased. Decide on one method, write it into the lease, and keep a ledger from the first payment. How to collect rent online compares the options.

11. Open a separate account

Keep the rental's money apart from yours: rent in, expenses out, deposits tracked separately. It makes your taxes simpler and your records cleaner — and if you ever have to prove what happened, it's the account statement that does it.

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Done all eleven? You're ahead of most landlords on their first day. The first-time landlord guide covers what comes next.

Common questions

General information, not legal or tax advice. Where we state a law, we link the statute and re-check it on a schedule; your city or county can add rules of its own.