Before you even start to think about crunching the numbers you need to decide if being a Landlord is something you are prepared for. What if the Refrigerator or Air Conditioning goes out? What if you do not receive the Rent Check? You can always hire a property management company however this takes away from monthly cashflows, but may be worth it.
Crunching the numbers. If you do not need the money from the sale of your home to purchase a new one it can be very appealing to hold on to the existing home, collecting rent, to see positive monthly cash flow and potential equity growth. Real estate has been and appears will continue to be a very good investment. If choosing to become an investor and rent out the home you may want to get a accountant/tax professional that has real estate investor clients and is up on all and any new IRS guidelines when it comes to real estate. Also check with local agents and appraisers to see how is the rental market currently and how do you see it in the future? Is the amount of rent to be collected covering the expenses such as taxes, maintenance, reserves to replace items as they need replacing, utilities your including in the rent, current mortgage payments, HOA dues, ect ?
I personally have been very fortunate when being a landlord however the nightmares do exist. You need to establish a good screening process. This would include credit check, possibly a background check, and questions on how many people to occupy the home, pets, ect. Keep in mind that as people live in a home its going to depreciate, in some cases more than others.
With the help of a real estate appraiser you can get the current market value of the home as well as the current rental rate. The appraiser can also estimate the operating income and expenses illustrating cash flow.