Landlord Doesn't Have to be a Dirty Word

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HOW TO "PRICE" YOUR UNITS

Obviously, before you put your newly renovated house, duplex, or apartment on the market, you have to decide how much rent to charge. Depending on the type of unit you're offering and the housing situation in your particular area, this can vary considerably. "We figure on a minimum of one percent of the house's value per month, plus something extra to cover expenses," explains Larry. "For instance, if you have a house that's worth $10,000, you should figure on charging at least $100-or one percent-per month, plus say $20 or $30 additional to pay for plumbing repairs, cleaning materials, etc. A total, in other words, of $120 or $130 a month.

"In general," Larry continues, "we try to give everyone-including ourselves-agood deal. Our rates-$135 a month for the small house and $100 a month, average, for the ten units in our apartment building-are about 25% below the going rate for equivalent housing in town. The tenants, naturally, are happy about this ... and we're happy, because our loan payments right now are only about $350 per month, while our gross monthly income is around $1,100."

Larry and Cathy definitely recommend taking a cleaning deposit on every rental unit. "But here again," says Larry, "we don't try to take advantage of anyone. All we require in the way of `security' is half a month's rent, refundable when the tenant leaves."

The Passmores have never required their tenants to sign leases, and don't recommend the practice. (Leases, Cathy and Larry feel, are simply crutches used by landlords who have trouble renting their properties.) "It's true that you lose money whenever your units are vacant," Larry explains. "We figure, though, that tenants who are forced to stay and pay under the terms of a lease are going to be unhappy tenants, and unhappy tenants are going to find some small, unpleasant ways of showing you what they think of your policies."

The Passmores must be doing something right: In six years as landlords, they've lost exactly $5.00 in unpaid rent!

LANDLORD-TENANT RELATIONS

"Landlords have a certain stereotype as sinister figures," says Cathy, "probably because so many apartment owners are of the absentee type ... wealthy people who just want their checks every month. That kind of attitude is what takes the human element out of landlord-tenant relations."

Cathy and Larry, on the other hand, feel that good landlord-tenant relations are important. They make a point of getting to know their tenants as friends, and often start by having new renters over for dinner. Likewise, the Passmores take care of repairs and yard work themselves . . . and they don't make a big scene if a tenant is just a few days late with rent. (More important, they don't raise the rent just for the sake of raising it.)

Of course, it helps to find the right kind of tenants in the first place . . . people who'll appreciate the work that's gone into your apartment or house. In this regard, it's best-the Passmores say-to eliminate the negative and accentuate the positive in your ads. Rather than say "NO pets, NO children, NO drinkers," etc., Cathy and Larry write ads something like: "Close to campus, small but cozy house, freshly painted. Wooden furniture included."

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