As retirement approaches, I often meet people considering rental income instead of relying solely on savings. The idea is that by renting out a home, they can create a monthly cash flow when their fixed income stops after retirement. However, many feel overwhelmed about how to set the rent price.

In San Fernando, the median rent for all types was $2,450 according to Zumper in March 2026, showing a decrease of 7.63 percent from the previous month and 6.07 percent from the previous year. According to RentCafe, one-bedroom units are priced between $1,700 and $1,950, while two-bedroom units range from $2,495 to $2,595. Given the recent downward trend, it's advisable not to set the rent too high to minimize vacancy periods.

Once the rent is set, it's time to advertise. Registering on platforms like Zillow or Apartments.com and providing detailed descriptions and photos can significantly reduce response times. It's important to include features that compare favorably with the local market, such as parking availability or whether there is a washer and dryer.

When applicants come in, screening is the next step. It's standard to check credit scores, income verification, and past rental history, often using a guideline of three times the rent for income. Applying the same criteria to all applicants helps avoid issues later on.

Once a tenant is selected, a lease agreement must be drafted. Items such as rent amount, payment methods, security deposit conditions, repair responsibilities, and lease duration should all be documented. Conditions agreed upon verbally can be difficult to enforce later if disputes arise.

In California, the security deposit is generally capped at one month's rent. This is in accordance with the AB 12 amendment that took effect in July 2024, which allows individual landlords owning two or fewer rental properties or four or fewer units to collect up to two months' rent. The security deposit must be returned or an itemized statement provided within 21 days after the tenant vacates.

San Fernando does not have its own rental regulations, so landlords should follow the statewide AB 1482. If a tenant has lived in the unit for more than 12 months, the lease cannot be terminated without just cause, and annual rent increases are limited to the lower of 5 percent plus the consumer price index or 10 percent.

While these regulations may seem cumbersome for those starting rental as a side business after retirement, they also provide a framework that makes the landlord-tenant relationship more predictable.

Changing locks or removing belongings immediately when rent is overdue is illegal in California. A three-day notice must be sent first, and if the issue is not resolved, a formal eviction lawsuit must be filed in court. Since rental income may become a primary source of income after retirement, understanding these procedures in advance can help avoid panic when issues arise.

Security deposit deductions must also distinguish between normal wear and tear and actual damage. Natural occurrences like wall discoloration or carpet indentations over time are not deductible, while damages caused by negligence can be deducted.

Before starting to rent, it's advisable to switch to landlord insurance for your property. Standard homeowner's insurance often does not cover situations where tenants are living in the property.

There are also rules for checking on the property while tenants are living there. In California, landlords must provide written notice 24 hours in advance and visit during normal business hours. The same notice period applies when wanting to increase rent. If the increase is less than 10 percent, a 30-day notice is required; if it exceeds 10 percent, a 90-day notice is necessary. Familiarizing yourself with these basic rules can be beneficial for ensuring stable rental income after retirement.

This article is for informational purposes only and does not substitute for legal advice. Please consult a real estate professional or attorney before drafting any contracts.