Landlord Doesn't Have to be a Dirty Word

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Success in the rental business depends-in part-on your ability to make wise purchasing decisions . . . so while you're saving up money for a down payment, become familiar with the local real estate situation. Keep your eyes open for a lowpriced (the lower the better), cosmetically poor-but structurally soundhouse located in a good neighborhood.

All of the properties the Passmores have bought over the past six years had been on the market for quite some time before Cathy and Larry discovered them. Also, the homes' owners-in each case-carried the contracts, because the banks wouldn't make loans on the houses. "We've never had a bank mortgage," Larry says. "And actually, that's good. By getting the previous owner to carry the contract, we've been able to buy places for as little as $1,500 down, with interest rates two or more percentage points below the going bank loan rates."

Of course, if you're "lucky" enough to get bank financing, the lending institution will see to it that the house you're buying has clear title, has been recently surveyed, is insurable, etc. Otherwise, you'll have to take it upon yourself to ascertain the status of the title, survey, insurance coverage(s), and so on. When in doubt, retain a real estate lawyer.

It's important, too, not to be overly optimistic about the house, duplex, or apartment building you're considering buying. Cathy and Larry always assumed the worst about the place in question, no matter what its apparent condition. They figured that if they could come out even on a house after everything that could possibly go wrong did go wrong, the place was a good buy. (That way, if the water heater didn't burst as expected ... they came out ahead.) "It's better to be safe than sorry," says Larry.

REMODELING TIME

Once you've made your purchase, it's time to remodel the house, duplex, or apartment. Here again, it doesn't pay to be optimistic: Each of the Passmores' residences, for instance, took about six months of spare-time work to make livable . . . about twice as long as expected. (Needless to say, the couple learned very quickly not to predict completion dates for anxious renters.) Cathy and Larry will be the first to admit that remodeling is long, hard work. "You have to really enjoy what you're doing," Cathy says. "Luckily, we do."

The Passmores' love for their work is reflected in the way they've furnished their apartments. Instead of equipping the units with self-destruct plastic tables and chairs, the Passmores bought the best old wooden furniture they could afford. They figured that the tenants would feel more "at home" with such items, and that the furnishings wouldrather than depreciate-actually become more valuable with time.

Other landlords told Cathy and Larry that they were crazy to put so much effort into making their places nice "just for renters". The couple has found, however, that their efforts pay off in the long run: They've never had the slightest bit of trouble, for instance, with theft or vandalism . . . and they've never shown an apartment or house without renting it on the spot.

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