Determine whether you want to select the tenant and handle property issues or hire a company to do it. If you take on the responsibility, you are obliged to fix any problems (leaky faucets, broken furnace, etc.) or find professionals to do it.
"Are you prepared to do all of this this on your weekends or evenings or get calls while you're at work because a pipe burst and it's flooding?" asks Jim Warren, chief marketing officer for property management company FirstService Residential Realty. "What's that threshold worth to you?"
Property management firms can charge a percentage of the rent, sometimes 10 percent or more.
Hiring out the hands-on landlord job also makes sense if your rental property is not in the same city where you live.
Do the math
Although prevailing rental prices will go a long way toward determining what you can charge, getting the best return on your investment starts with making sure you're going to get enough rent to, ideally, cover expenses and costs.
Princis' formula is charging 15 percent above monthly mortgage and maintenance costs. So if those costs add up to $1,000, he'll look to charge $1,150.
Of course, flexibility might be called for if you're unable to get a tenant in for months and months.
Experts recommend starting with popular rental listings in newspapers or on websites such as Craigslist, Trulia and Zillow, to see what comparable apartments or rooms are going for. Another option is rent analysis website Rentometer.com.
The good news: Rents for single-family homes rose 2.3 percent last year from 2011, according to Trulia.
Once your rental starts drawing inquiries, it pays off to screen prospective tenants by asking for previous landlord references and running a credit and a criminal records check.
Experts also recommend asking for a deposit equal to one month's rent, plus extra if the tenant has pets. That will help cover any damage to the property and protect you if a tenant moves without paying rent.
Also, have a walkthrough of the unit with the tenant and ask that they sign off on the condition of the property before they move in. That will help avoid conflicts over the security deposit if there are damages once they're ready to move out.
Know the landlord laws
As a neophyte landlord, it's important to know your exact responsibilities under the law.
Two good resources for rental rules are the U.S. Department of Housing and Urban Development's website, www.hud.gov, and the Landlord Protection Agency, www.thelpa.com, which includes state-specific rental guidelines and standardized forms for rental agreements.