Landlord Doesn't Have to be a Dirty Word

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Today, Cathy and Larry's rental property holdings (one $7,600 house and the $37,000 ten-plex) are worth -roughly-twice what they paid for them. The couple has bought and sold (for a profit) several other small dwellings, and their current rentals bring them a gross monthly income of $1,135. In short, the Passmores now have what they've always wanted: a degree of financial independence and the freedom to work when they want at a job they like . . . for a boss (themselves) that they can really get along with.

YOU CAN DO IT, TOO

OK. Let's assume you want to "break into" the apartment rentals business. Probably the best way to start is to manage someone else's rental units for a while. This'll enable you to determine whether or not you like the work before you make any financial commitments.

Check the want-ad columns of your local paper. Apartment-manager positions are usually plentiful. Of course, you can never be sure how any given job will work out . . . but if a situation doesn't suit you, you haven't lost anything. (In fact, you're knowledge and experience ahead.)

Arrangements do vary. The Passmores' first job, for instance, was with a large rental corporation that owned units all over town. For the corporation's tax purposes, Cathy and Larry did have to pay rent on their apartment, but they were each paid $2.50 an hour for their time plus one percent of the monthly gross (which didn't amount to much). The best part of the deal was that Larry and Cathy were able to earn more than their rent by doing minor fix-up jobs at the other apartments operated by the corporation.

After three months with their original employer, however, the couple moved on to a better job managing an older apartment house. (Three months was the minimum they'd promised to stay. The Passmores feel it's important to give your boss a "minimum stay" time up front, then stick to it. You'll get a better recommendation in the end.)

Older apartment houses offer a couple of important advantages for first-time managers. In the first place, an aged building requires more maintenance than a newer one, which means that your time and skill as a repairperson become more valuable to your employer. Second, the unit you live in (assuming that it, too, is old) will have a low rent and-consequently-you won't find yourself working to support a dishwasher, an expensive shag rug, and/or other "luxuries".

Once you do find a good setup (and it's only a matter of time until you do), stay with it. The Passmores say that one of their secrets of success is that-throughout their apartment-renting career (even to this day)they've lived essentially rent-free by managing someone else's units. (Their present apartment-a $175-per-month unit with a fireplace and beautiful old wooden floors-is no dump, either!)

HOW TO BUY RENTAL PROPERTY

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