Try your hand as a landlord

NEW YORK (CNNMoney.com) -- With median home prices falling, it's not an especially good time to sell your home, so generating revenue by renting may be more attractive. Here's what you need to know if you want to be a landlord.

Renting is not for everyone. If you're thinking about renting, you have to be able to handle surprises. A lot can go wrong, says Jeffrey Taylor of MrLandlord.com.

Rents may not be paid on time. Tenants may break the lease. There will be maintenance issues. If you need to have control over everything, renting may not be the right way to go.

First, you need to review tenant landlord laws in your state, which might dictate things like how much deposit you can receive. In some states you can only collect one month's rent as a security deposit, while in other states you are allowed to collect up to three months' rent.

There are also rules governing how long you have to give back that security deposit and how much you can charge for the application process. To find out what the laws are, go to your state's Department of Consumer Protection. When you rent out your home, there's a lot of paperwork involved.

You'll need legal rental forms that are specific to your state - if there's a dispute, you'll want to have the law on your side. You can download a state specific rental application, move-in check-list and lease forms at mrlandlord.com.

It's almost impossible to be fully prepared. But you need to know where to get information or assistance when you need it. Join a local landlord association or real estate association in your area. You'll be able to get referrals, support and guidance from fellow landlords.

You'll also want to create a network of professionals who can help you out when maintenance issues arise. Maintain close relations with plumbers, electricians and attorneys.

To make sure you're pricing your rental right, make sure you do your research. Go online to Craigslist or move.com and seek out rental ads in your local paper to see what the going rate is. It's also a good idea to attend an open house that's advertised just so you can compare what is being offered.

Make sure the rental price will cover the cost of keeping the place going, including mortgage payments, utilities, and repairs.

Don't choose a tenant because of a gut feeling. You'll want to run a credit check on applicants.

"It only takes one or two dishonest people to really cause trouble," says Taylor. Check out tenant screening companies like the National Tenant Network or ChoicePoint Tenant History Reports. Always verify information that's given to you. Doing your homework will help you avoid problems in the future.