There was a landlord in Sacramento who set the rent too low and suffered losses for several months. They based their pricing on rough estimates from neighboring properties, but the actual number of bedrooms and the condition of the homes were different, making them not comparable. The first question that comes to mind is how much should be charged.

The average rent in Sacramento is $1,795 (Zumper, as of July 2026, a 3 percent decrease from the previous year). Even within the same city, there are significant differences by neighborhood. Midtown is relatively low at around $1,695, while other neighborhoods are priced higher. When comparing two neighboring areas that seem similar, the actual market prices can differ, so it's safer to look for multiple listings with the same number of bedrooms before deciding.

Once the rent is set, it's time to advertise. Post on platforms like Zillow, Apartments.com, and Zumper simultaneously, and include details about parking and pet policies along with photos to organize inquiries.

When selecting tenants, check their credit scores, income verification, and previous rental history. Income is often based on a standard of three times the rent, and it's important to apply the same criteria to all applicants.

The lease must include the rental period, monthly rent and due date, security deposit, repair responsibilities, and termination conditions without omission.

• Check neighborhood price differences to set rent
• Advertise on multiple platforms with photos and conditions
• Verify tenants using credit scores, income, and rental history
• Specify rental period, rent, security deposit, and termination conditions in the lease
• Check security deposit limits, return deadlines, and notice periods

California has limited security deposits to one month's rent under AB 12 starting July 2024. Individual landlords with four or fewer rental units can receive up to two months' rent as an exception. Security deposits must be returned within 21 days after eviction or a statement of deductions must be sent (Civil Code Section 1950.5). If rent is unpaid, procedures can be initiated after a 3-day notice, and for no-cause lease terminations, a 30-day notice is required if the residency is less than one year, and 60 days if more than one year.

A screening fee can be charged when receiving applications, but there is a limit. As of 2026, it is $65.86, and if the actual cost is less, the difference must be refunded (Civil Code Section 1950.6).

It's also important to know how much rent can be increased each year. If the building is over 15 years old, under AB 1482, the annual increase is limited to the inflation rate plus 5 percent, with a maximum of 10 percent. Tenants who have lived there for more than a year cannot be evicted without just cause. Single-family homes owned by individuals can be exempt if a notice is included in the lease.

Landlords also have the duty to keep plumbing, heating, and security systems in good working order. Repair requests should be handled within a reasonable time frame. Just as it's important to set the rent accurately from the start, it's crucial not to overlook these maintenance obligations to minimize losses.

On the day the tenant moves in, it's advisable to document the condition of the home with photos and notes. Recording the state of the walls, floors, and appliances in advance makes it easier to distinguish between original damages and new ones when settling the security deposit. It's even better to confirm this with the tenant and get their signature.

The lease term should also be determined in advance. A fixed one-year lease provides stability without vacancy concerns. Month-to-month leases offer flexibility but come with vacancy risks. If you're unsure about pricing, starting with a one-year fixed lease to observe market reactions can be a good strategy.

It's also important to review any existing homeowners insurance. Homeowner insurance for primary residents and rental insurance have different coverage. If you don't switch to landlord insurance, you may not be covered for incidents that occur while the tenant is living there.

Specific conditions may vary by county. It's recommended to consult with a real estate professional or a rental law attorney before drafting a lease. This article is for informational purposes only and does not constitute legal advice.