My parents rented properties for extra income most of their lives. If you have good tenants, it's a pleasure. If you have bad ones, it's a nightmare. There are a lot of rules, regulations and legal obligations around renting and you need to understand them or you will be sued. I like to watch Judge Judy and it's eye opening. You need to find a primer for rules and regs in your state re landlord and tenant. There is an apartment forum in GW that has some threads on that too. The lease is absolutely the document that must fully represent every iota of the agreement between landlord and tenant. There can be no verbal alterations or agreements beyond that document. If you want to change anything, it must be done in writing and signed by both parties. Take before move in and after move out pictures of the house so that you can defend the security deposit. Have a clause in the lease that any repairs under $150 or $200 or whatever are the responsibility of the tenant. It will help prevent things like the time my dad was called because the light was broken in the refrigerator...he went over and tightened the bulb. Or the time he was called because the oven was smoking...it needed cleaning. If you are in the area, then I would schedule an inspection every couple of months just to protect your interest in the property...make sure the proper number of tenants are living there, the place is not being destroyed with pet feces or whatever. You can be amazed by what people are willing to live with. Absolutely do due diligence on vetting the tenants with income tax statements, references from prior landlords, credit ratings, etc. You need to protect yourself financially as well. Brother owned a rental property and rented to a fellow who, unbeknownst to him, had his GF move in. He left but she stayed and didn't pay rent. So he went to evict her. Turns out, all she needed was a single piece of mail with her name on it at that address to prove she was a resident and he had to bring eviction proceedings against her! And she knew how to work the system...it was months before he got rid of her. My parents also had a fellow live in their little house for over 20 years...he took better care of the place than they did, and he paid his rent like clockwork, even installed a new heating system (he worked for a hvac company) and he was a good neighbor. So it can go both ways....

It isn't easy to generate a net revenue stream from a rental property under the best of circumstances and is nearly impossible if you are using a property management company. If you want to be a landlord, you really need to be the landlord. If you have to pay someone else to manage the place, that often eats up whatever cash flow was available. As a general rule, you cannot expect for someone to pay significantly more in rent than it costs to cover the mortgage, insurance, upkeep etc at first. The key to making money is to hold the place over time. If you have a fixed mortgage rate, you lock in most of your expenses at today's costs. Over time, rent rates tend to increase, so eventually you should have a positive cash flow. Sometime in the future, you will have the place paid off and then you can just continue to collect rent or sell it and cash out the equity. Of course, all sorts of things can go wrong in the meantime. You can have major repairs. You can have deadbeat tenants. Your town can overbuild apartments and drive your rent down. Who knows what the future holds? If you are looking for a safe, no work way to make money, rental property isn't the way to go. If you are willing to manage the place and have enough other assets to weather the tough patches, then you may want to look into it further.

Property is North New Jersey, looking for a 3 ton split level furnace and AC unit. Whole system is 25 yrs old, so I guess I am replacing gas furnace as well even though it works. Not too worried about efficiency as other units in the building have bottom end units, some still 25 years old, and I wont qualify for any tax credits bc its non-owner occupied, and I also wont be paying the bill ever. Meeting with more contractors on Monday and will have model numbers then. Other unit's compressors went last yr and they just put in R22 Lennox 13acx, so by doing a whole new system I am already overfixing relative to others. Thanks

"Your renters may not be too cooperative. There are lots of subtle ways they can sink your potential sales. For one thing, they will resent people touring their homes for your convenience. It doesn't matter that you are they owner, they are the ones living there." You right about that. We looked at a house for sale that had the renters living in it. They weren't untidy, but they had a number of cats and the place smelled like it. My spouse likes to ride a mountain bike. They told him he would be fine riding the bike around so long as he wore orange (hunters). They also casually mentioned a buried oil tank and flood issues. The real estate agent didn't seem to pleased. We could tell they didn't want to move. I asked why they didn't buy the place themselves and they said they couldn't afford it. I personally wouldn't try to sell a house with renters. I'd give them the necessary notice and see what shape the house is in after they move out. Especially if they feel they are being given the heave ho. If they don't own the house in the first place they probably won't care what shape they leave it in. Many people who rent live paycheck to paycheck. If you have to sue for damages, you won't have much luck getting money out of a stone.