I have been a landlord for 14 years. First to the house I'd owned before my husband and I bought a house and for the last 12.5 years for the 2 little houses next door that we bought and fixed up. If I were to live 5 hours away, I'd probably hire a management company, though if you have reliable repair people, you can do it long distance. I was in Puerto Rico when I got a call from my tenant about sewer problems. I had someone at her house within a couple hours. However, since you've never managed a property before you probably don't want to do this from so far away.
Either way, you need to get VERY informed with the laws in your state. I read a book about renting properties in my state. I also read an older version of http://www.amazon.com/Landlording-Handymanual-Scrupulous-Landladies-Themselves/dp/0932956335/ref=sr_1_1?ie=UTF8&qid=1310104514&sr=8-1 There may be better books out there now, I don't know, that's just what I read.
The two most critical things you can do when being a landlord are
1. Treat everyone alike. Establish a list of requirements potential tenants have to meet. NEVER, EVER, EVER stray from that list. Make sure it is requirements anyone of any race, age, sex, etc. can meet. NEVER make statements that are related to protected classes. EVER. You do not want to be hauled into court for discrimination. If there is a local real estate school, take a class on equal opportunity housing.
2. Be VERY selective on who you let move in. It's better to have the house sit vacant for a few months than to let someone with a less than stellar background move in. I gave this advice to a friend, she disregarded it because she felt desperate, then she called me with even bigger desperation when she was having trouble with her tenant. However, if someone meets all your requirements, you have to let them move in. Failure to do so could end you up in court with a discrimination lawsuit.
Some of my requirements are:
Each person must do a background check. They pay the cost. I personally do income/employment references and prior landlord references. Then I do personal references. If those are all stellar, I do the background check. You can find companies that will do this for you. The things I have checked are: credit history, local and national criminal, prior evictions, bad checks, sex offenders. It seems there's something else, but I can't remember. They must be pretty perfect for me to let them move in.
Each person must earn 3 times the monthly rent each month. (I'm not sure what I would do for married couples since I've never had a married couple. You want each person to have enough money to pay the rent by themselves in case there's a fight and someone moves out.) I do use student aid as income and I do let the parents of students co-sign, but the parents must have a background check done as well.
By state law I must allow 2 people per bedroom, but I will not go over that no matter what. It would just get too crowded.
No smoking. (Do not say no smokers as that is a discriminatory statement.)
I do not allow my tenants to do any repairs. No matter how qualified they are (or say they are) I don't do it. If I let one person, then don't let another person, they could complain about discrimination. Plus, I have no way of knowing what quality their work will be. I don't want to offend anyone so I just say no tenants can do repairs.
I will not let someone pay me the security deposit in installments. If they don't have the cash upfront, they can't move in. Sometimes they can have really sad stories, but I don't budge. I don't know who these people are and I want the full deposit.
Always have you (or your property manager) meet the potential tenant before signing a lease. I live near a university and advertise on craigslist. I get a lot of people who want to rent before they arrive for school. I always say no to this. I was so glad I had this policy when someone wanted me to lease to her and her fiancee. I won't go into the details, but based on what she was saying he sounded like a scam artist who was scamming her. I just kept repeating my policy that I needed to meet him before I would rent to him. It really saved me.
I change the locks between tenants. That way no one can ever claim that someone with a key broke in.
I put in the lease that either me or my representative can inspect the inside of the house for preventative maintenance. We can do this once a month with at least 24 hours notice. However, I am not required to make these inspections. (I do this because I want to be able to get inside my house to make sure it is well cared for. Without this clause, the tenants could refuse me entry while they are damaging my house.)
I include in my lease that they won't be noisy (I put it in legalese.) I also tell them I expect them to be respectful of the neighbors and that loud noise will not be tolerated.
Frankly, I come off as pretty harsh with all my rules. I like it that way. It really lets a lot of people self-select themselves away from my houses. If they're going to cause problems, I want to make my circumstances harsh for them so they'll go far, far away.
Include installing a security system. Our personal residence uses http://www.alarmrelay.com/. It's only $8 a month for constant monitoring. We've gotten great service. Although the security system would be a nice feature for a tenant, my main reason for suggesting it is so you can have the smoke detector plugged into the monitoring company. If something happens and your house catches on fire, you want it caught as soon as possible.
It's getting kind of late so I'll stop here. PM me if you have any specific questions.