Few people grow up wanting to be landlords. Real estate investors, sure, but not landlords. The idea of being a landlord has an unfortunately negative connotation right off the bat – either you’re the mean guy who constantly raises the rent or you’re the poor soul who has to deal with the tenants from hell. Fortunately, it doesn’t have to be that way. There are ways to rent out you house for a fair price to good people. Read on to learn the seven steps that’ll get you there.

1st:  Assess your property

The state of your property is a good indication of how well you’ll do as a landlord. If the property is in good repair and sits in a safe part of town, you’re more likely to attract quality renters. In this case, “quality” means someone who will honor their rental agreement and will take good care of the property.

If your property doesn’t meet these basic standards, you may be better off selling it. Even if you can’t unload it for a profit, it may be worth it just to be free of constant rental hassles.

2nd:  Assess your own abilities

If your house is well-suited to be a rental property, the next question you should ask yourself is whether you’re well-suited to be a landlord. A lot of it has to do with temperament. Are you generally a patient person, or do you tend to be confrontational?  How do you handle difficult situations?  Do challenges stress you out or do you work your way calmly through them?

Another crucial question to ask is whether you even have the time to be a landlord. Depending on how hands-on you plan to be, you may be required to spend a sizeable chunk of time at your property either repairing things or arranging for repairs.

3rd:  Remember it’s not just about you

While it’s important to assess whether you’re ready to be a landlord, you also need to give serious thought to whether you’ll be able to honor your responsibilities as a landlord. After all, it’ll be your responsibility to provide a safe, fully-functional home for your tenants. You’ll need to act quickly when problems are reported to you, especially if the safety of your tenants is ever in question.

You’ll also need to follow the law when it comes to advertising your rental, selecting tenants, and initiating eviction proceedings. You can’t simply ignore the standards set by government agencies, and you’ll have to act in accordance with complicated legal guidelines.

4th:  Decide whether the job is for you or for someone else

If you don’t feel like you’re ideally suited to the job, that’s fine. The next decision to weigh is whether it’s worth it to you to hire a property management service. If you’re going to be living in a different town, there’s no question that you should hire the job out. After all, someone has to be available on site to manage the rental.

5th:  Consider the financial picture

Once you’ve decided whether you’ll be in charge of your rental or whether you’ll hire out help, you need to figure up your expected costs. First, calculate the total cost of keeping your rental going. This includes mortgage payments, utilities, yard work, maintenance, repairs, and property management fees if that’s the route you choose.

Next, figure up your rental fee. This won’t necessarily be the same as your cost of ownership. A competitive rent price will have to reflect local rates. Take a look at ads for rental properties in the same area as your rental and check with property management agencies to come up with a fair price.

Finally, compare your rental price with the costs you know you’ll have. Consider two scenarios – a best-case and a worst-case. Ideally, you’ll find that you’re poised to make a profit. If not, consider just how much loss you can handle.

6th:  Advertise for tenants

Finding the right renter is probably the most important task of the whole rental process. Start by putting together a rental application that asks for the applicant’s full identity, rental history, and credit picture.

Ideally, you should perform a credit check on any potential renter. If you do so, you need to disclose that information in the rental application. You also must ask your applicants to sign a release that shows they agree to the credit check.

After a potential tenant submits an application, follow through on checking references. Ideally, check with the applicants last two landlords to determine whether the applicant was a responsible renter.

Don’t simply hope you can trust your gut when choosing a tenant. For one, even if you’re normally a good judge of character you may end up with an unpleasant surprise. On top of that, it’s not legal to choose or decline a tenant based on a gut feeling. You have to have tangible, verifiable reasons for the decision you make.

7th:  Check with the law

Once you have a tenant selected, go back and review the landlord-tenant laws for your state. Make sure you’re aware of all legal considerations regarding your obligations as a landlord and the rights of your tenant. It may seem like a fair bit of work, but keeping yourself free of hassle when it comes to renting out your house will be worth all the time invested in the end.