Set clear expectations before renting your home

Many consumers are seeking out creative ways to earn additional cash these days, ranging from getting a part-time job or freelancing to having garage sales and selling their items on eBay. But many homeowners who own investment properties, vacation homes or simply have more space than they need in their current residence are renting out their properties to bring in steady income.

While renting your home can be financially beneficial to both you and a prospective tenant, it's important to set some ground rules to avoid legal issues or other problems that may arise in the future.

First and foremost, it's crucial to have a contract or rental lease in place, according to Fox Business*. A lease should include a clear and comprehensive listing of what is included in the price of rent, your responsibilities as a landlord, your tenant's responsibilities as a renter and the terms and conditions of the agreement. Because there are a number of factors and details that may be easily overlooked by a first-time landlord, relying on an attorney to draw up the rental contract can help you protect your investment.

"Many times people tend to be a little wary of contacting an attorney because there is a cost involved, but paying an attorney's fees up front is going to be a lot cheaper than going into litigation with a tenant if you have a lease that doesn't protect you," Kaye and Bender managing partner Robert Kaye told Fox Business.

Don't underestimate the power of a first impression

Anyone can make themselves look good on paper, but meeting a person face to face can alert you to personality habits or characteristics that you may find unfavorable. It's important that you trust the person that will be living in your home and you may find upon meeting him or her that this is not the individual you want to share your home with. For this reason, make it a point to meet the individual first to air out any potential issues or problems that may arise.

Take precautions

The reason for opening your home to a tenant is to bring in a steady income, so make sure the individuals you are considering are in a position to follow through financially. Running a credit check and requesting proof of income are not uncommon, and getting an accurate picture of how a person has managed his or her finances in the past can put you at ease or encourage you to consider a more suitable tenant, the news source explains. It's important to be upfront about asking about income and requesting pay stubs or asking an individual to detail his or her employment situation can save you financial headaches in the end.

*according to Fox Business on Nov. 23, 2011