Soon to be new landlord - what I have done, what I need to do

[Kris Belco]

A total real estate investing newbie here. I don't even know if the term "real estate investor" is a misnomer for me! I'm taking really small steps in going into this, but from what I have read, this is the path taken by a lot of successful folks in this community. I have read the "The Definitive Step by Step Guide" by Brandon, and the other newbie posts.

So, this is my scenario: I (with my wife and child) live in the first home we bought 5 and half years ago. We will be soon moving to our new home and planning to convert our current home to a rental. We were approved for the mortgage on the new home based on our current incomes and assets and taking into consideration the current mortgage. That part is done and closed. I have no questions on that.

Here is the information on the current home (which will be rented out):

- One part of a twin home (basically share one wall with one other unit), with home owners association in place

- HOA do not have rental restrictions. No issues with that.

- Mortgage payments (PITI) and association fees every month comes to $1,200

- I had a rental analysis done, and also based on similar rentals in the neighborhood, our house should easily pull in $1,600.

- I have a checking account that I maintain just for the property, which currently contains $4,000. The $400 "profit" from every month will be going into this account earmarked for potential vacancies, maintenance, and repairs. Also keep in mind that since we have a HOA, all exterior (roof, drive way, lawn, snow-care et all) maintenance is taken care by the HOA property management (which I pay for, but already accounted for).

- I plan to get the balance on this account up to $8,000, which should take 10 months, barring any expensive internal repair or maintenance. Anything over the $8,000 is my actual profit from the whole thing. Point to note: I have other checking/savings account with substantial savings which I can dip into if I really need more money for an emergency.

- I am planning to go into landlord mode without any commercial property management help (not considering the management company that already manages the HOA).

Ohkay, those were the background. Now I know there are a lot of things I need to do. That's where comments/advice/suggestions of this site comes in.

This is the list (in the chronological order) that I think I need to follow. Please point out any missed steps, wrong steps or any thing else you feel I need to know.

- Get rental license from my city. I already have the form; need to fill it out and it should be approved in a week. This may not be valid for other cities/counties/state, but for my city I KNOW this is required.

- Get started on Postlet, to prepare the rental ad

- Publish the rental ad in Craigslist, Zillow, Trulia

- Start receiving calls. Start the initial screening process right in the call.

- Show the place to potential tenants who pass initial screening

- Get the filled application form and the application fee from parties who are interested after the showing

- Run background and credit checks through SmartMove with details from the application form

- Approve or reject based on the checks

- Get a deposit to hold the property

- Draw up rental lease agreement using EZLandlordForms or USLegalForms

- Sign the rental lease agreement and get the security deposit and first month rent.

- Change insurance on the house to "landlord insurance" (?). [The HOA fee covers the better part of insurance on the house. The insurance that I pay as part of the mortgage - as the last I in PITI - goes to the financial institution which holds my mortgage and they in turn pay it to the insurance company, and this is a small amount. I don't know if this is the norm, but for FHA refinance this was the arrangement that we were told IS the norm].

Anything else?

I have probably put to sleep half of the people who started to read this! Apologies, and thanks in advance to anyone who responds!