Becoming a landlord is not as simple as 1-2-3, but learning the basics and your state’s landlord-tenant laws is a good place to start.

1. Determine monthly rental fees and security deposits

“There is no real estate more local than the rental market,” says Bill Lederer, founder and publisher of Completelandlord, which provides landlord-tenant guidance. Find out the going rate for comparable units or properties in your area. “The Internet is a wonderful resource for landlords to assess what market conditions are,” Lederer says. Talk to other owners, check out postings in the local classifieds and, if you have the time and flexibility, try setting the price slightly higher and assessing the prospective tenant feedback. Security deposits are typically set at one or two months’ rent, but laws vary by state.

2. Know your responsibilities

The tenant-landlord relationship can turn into a court date more easily than you might think — just look at how many lawyers practicing real estate litigation are listed in the yellow pages. Because fair housing and tenant-landlord statutes vary so much, be sure to check your local government website for pertinent information. The websites for the Landlord Protection Agency as well as the U.S. Department of Housing and Urban Development provide state-by-state laws that affect landlord-tenant legal rights. At the very least, “provide plumbing, heating and electrical systems in working order and a roof free of leaks,” says John Reno, a Long Island, N.Y.-based attorney specializing in real estate law. “Unless the lease imposes certain responsibilities on the tenants, everything goes to the landlord when it comes to keeping the place habitable,” says Reno.

3. Wordsmith your lease

How long do you plan on renting your property to a tenant? Are pets allowed in the rental home? Do you mind if your tenant smokes cigarettes? Every lease should contain components addressing length, terms of use, occupancy, rental and security fees, landlord entry, and payment of utilities. “Don’t worry about the length,” says Lederer. “The most important thing is that the lease is comprehensive and compliant with the state in which the rental agreement is occurring.” Include details on other terms of use. If you’ve recently refinished the wood floors, for example, you might want to prohibit the use of waterbeds. “The best way for a landlord to protect himself is by having a good lease,” advises Reno. Websites such as Completelandlord and Nolo, an online provider of legal information, provide templates and standard forms for rental agreements so you don’t have to start from scratch.

4. Screen possible tenants

Once you select a tenant, you’ll have to live with her for the duration of the lease. While tedious, taking the time to do a full background check, including credit reports and references and verifying employment, is well worth avoiding the headache of a tenant defaulting on his monthly rent. (Seek permission in writing from the prospective tenant before conducting the check.) It’s in your best interest to find a responsible and respectful renter, so if the applicant has lied in any step of the process, move on to the next potential tenant.