- Property is purchased for the purpose of renting it out, or homeowners purchase a new home and rent out their existing home. Rental houses are sometimes purchased at a below-market price if they are not in a condition that a property owner would want to live in, or they are not in a neighborhood that is desirable for home ownership.
- The property owner finds a tenant to live in the house who is able and willing to pay the rent. The owner places ads or puts up signs indicating that the property is available for rent. When a person shows interest, she must go through a screening and application process. If the property owner decides that the tenant makes enough money and has a good credit history and references, the owner will write a lease agreement, collect rent and security deposits and turn over the keys to the unit.
- Before the tenant moves in, the tenant and homeowner may inspect the property together to record any damage and the overall condition of the property. When the tenant moves out, the owner can charge for any new damage but not for preexisting conditions. The tenant moves into the unit and pays rent monthly, on or near the first of the month. If the rent is paid late, the owner may charge fees. If the tenant ceases to pay, the property owner may start eviction procedures with the courts to get the tenant to pay or move out.
- When the tenant moves, whether the reason is lease expiration or another decision or reason to move, the property owner returns any portion of the security deposit that is due within a reasonable time after the tenant vacates the property. As soon as the owner knows the tenant is moving, the owner places a vacancy ad and starts the process all over again.
- The property owner makes repairs and improvements to the property as needed before the tenant moves in and during the tenancy. The property owner may choose to turn over management of the property to a property manager, who handles all of the functions except securing the property.
