You can start screening your lenders now and meet with them to determine which lender you'll want to work with and when you have your property lined up you can request the pre-approval letter to limit the inquiries on your credit.  

They tend to be very grateful for the home, but you do have to screen carefully.

Even though I will budget for vacancies, my biggest fear is that I'll initially make a few bad choices in the screening process and I'll have to evict families.

If you have nice furniture, huge big screen TV, high end cookware, etc... but your bed is uncomfortable or your sheets feel cheap, your guests will come away with a bad view of your place. 

My advice is to make sure you do a thorough tenant screening because they may be there for a while. 

Use www.postlets.com to advertise and then vet tenants by going to BP resources and use the tenant screening provided.Most important to contact prior landlords personally as they really can give you the best info on prospective tenants.This whole process doesn't take much time and I would rather take the responsibility of tenant screening than to abdicate what should be your responsibility.It's not like rental agency is going to give back fee if you get a horrible tenant who stops paying and needs to be evicted so might as well do it yourself.

This technique often leads to a management nightmare as they, or the management company they have chosen, are not prepared to properly screen tenants and manage a rental property in a distressed community.

That is where good screening and impeccable references come in.

You can't learn that sitting at home behind a computer screen. you learn that by going out into the market and looking at houses and networking with investors

I would make her apply (and pay the fee to do so), pass your screening process, and then they sign a new lease with the same end date unless you guys agree to a different date.