Advice: Newly Purchased Home with Apartment (and tenant) Included

[Jennifer McElwee]

I've recently purchased a home (that I intend to live in), and it includes a one-bedroom apartment above the detached garage.  The apartment currently has a tenant.  This tenant is a co-worker of the current seller, they do not have a contract, and the tenant has not paid a security deposit.  It's simply a verbal agreement between both parties.  The seller communicates that the tenant is very dependable and has never missed a rent payment.  The tenant would like to continue renting the apartment.

This is the first time my husband and I will be landlords.  My husband and I are in the process of writing up a rental agreement.  We will definitely be asking for a security deposit.  We have met the tenant and confirmed employment.   

Any words of wisdom out there?  Anything to watch out for?