Landlord Doesn't Have to be a Dirty Word

Image Gallery One of the Passmores' rental properties

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Out-and-out land speculation is one thing . . . but buying, cleaning up, renting out, and selling quality older homes for a profit is another. Quite possibly, it's just the "home business" you've been looking for!

If you're like most people, you probably feel that a landlord is just another one of those negative city things to be avoided at all costs. And-chances are-the thought of actually becoming a landlord yourself is the furthest thing from your mind.

Well, think again. Managing your own rental units can be an excellent way to [1] live rent-free, [2] be your own boss, and [3] build a healthy chunk of capital with which to finance other ventures (a move to the country, perhaps).

"That's great," you're probably saying, "if you've got the money to buy rental property in the first place." But wait! That's the beauty of the apartment-rental business: You don't have to be wealthy (or even moderately well off) to "break in". In fact, you can even start from scratch!

CASE IN POINT: THE PASSMORES

Take Cathy and Larry Passmore, for example. Six years ago, the couple left college with no money, no jobs, and no place to live. In order to keep food on the table, they took a job managing an apartment complex in Corvallis, Oregon (the small college town in which they had been living). Eventually, the Passmores did find outside jobs: Larry in landscape maintenance, Cathy as a waitress. At that point, the couple's earnings as apartment managers paid the rent, and most of their "regular job" earnings went into savings.

Then one day Larry spotted a small fix-itup house for sale near downtown. He and Cathy discussed the possibility of buying the place and renting it out, and-although everyone they talked to told them that rental property ownership was an incredible hasslethey decided to go ahead and give the idea a try. Cathy and Larry made a modest down payment on the $7,800 dwelling, set to work repairing it . . . and-after six months of evening, weekend, and lunch-break labor-they rented the home for $135 per month.

Over the next couple of years (while their first house was paying for itself) the Passmores bought two more houses andagain-spent about six months fixing each of them up. Both units were rented with no difficulty.

Before long, two of the realtors in town (who had heard of Cathy and Larry's growing rental business) approached the couple and asked them if they'd be interested in an ancient fraternity-house-turned-apartmentbuilding. The dwelling (a "ten-plex" built in 1911) was in desperate need of repairs and-as a result-the price had been reduced to a low (for that size dwelling) $37,000. Would the Passmores like to buy it?

Larry and Cathy hesitated. (It was, after all, a big house and a lot of money.) But they finally decided to purchase the old place and renovate it ... which meant giving up their fulltime jobs in order to devote the attention to the house that it needed. (Meanwhile-to offset the cost of repairs-the Passmores made and sold birdhouses, cutting boards, and Christmas tree ornaments during their "off" hours.)

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