Finances

Will the property generate positive Cash Flow every month? Will the rent exceed the mortgage? If not, will interest deductions, depreciation and appreciation make up for the monthly loss? Seek the advice of a person who owns and has been successful with rentals or do research. Most professional planners will not understand the long-term benefits of real estate. So, you will need to do your homework.

Property

Have the property deep-cleaned and painted or touched up, the carpets cleaned, and the grounds trimmed, cleaned, and swept. Hire a handyman to fix broken items.

Rent

Check the local newspaper for properties offered for rent in your area with comparable square footage, number of rooms, and amenities.

For quicker leasing, set the rent slightly below the asking price for comparable properties. Rents are often set as a percentage of the market value of a property (varies by area).

Tenant

Use a Credit Screening Service and check:

national credit score and rating
previous mortgage holder or landlord
bank balances
previous and/or current employers
criminal background check (optional)

Lease

A lease is a promise by the Tenant to pay the monthly rent and take care of the property, and sometimes by the Owner to keep heating, plumbing, and other systems in good condition. A lease is often the document that allows an Owner to close on the purchase of their next home. A lease gives the Owner the legal right to collect rent, late fees, or even evict if the tenant fails to pay rent or violates other terms of the lease. As you can see, the lease is a powerful instrument and must be properly prepared.

Management

Good: A neighbor or friend.
Better: Do it yourself.
Best: Hire a property management company