Just to answer a few questions, yes there is a HOA with the original house I posted about, and they have already okay-ed the idea of putting in the gravel - it's not a straight gravel operation by the way, but more along the lines of a Japanese rock garden, with a few plants here and there as highlights. I figured if I lay black plastic underneath, with a bed of gravel above a couple of inches thick, nothing is going to grow through it! A neighbor suggested using Asiatic dwarf jasmine as ground cover instead of the gravel option, while another did suggest perennial peanut. The dwarf Mondo makes me a little leery, as I half imagine the HOA screaming at us that it looks like unkempt grass in need of a mowing! As for the point about using a lawn service and writing it into the lease when we renew it, that is something we've definitely considered for our old home (the one with the pictures above of the rampant lawn) because the problem is that the area is so large that I think it puts the tenants off from keeping it well looked after. As I said, we bought a mower for the property that we wrote into the lease - they just didn't want to use it. The other house that I originally posted about though is a different situation, given that the front yard is relatively small (30' x 35'). The other issue I should have mentioned is that it isn't just case of taking care of the lawn - the present area is really in bad shape, with crab grass, bare patches everywhere, weeds, etc, and really should be replaced. That was our original intention and we had already lined up the replacement sod. But when we realized that the tenants weren't going to look after it, my wife and I looked at each other and wondered what would be the point of throwing all that money down for new sod, only to watch it either go wild through lack of attention, or die because the tenants wouldn't bother giving it the abundant twice-a-day watering needed in the first month - that or we'd have to drive over twice a day to take care of it ourselves. Then I also discovered that the sprinkler system was shot, because what I thought were mere missing sprinkler heads turned out to be crushed pipes from former tenants parking off the concrete constantly and on the lawn (a fact confirmed by neighbors) or what was left of it. So it would all have to be dug up and replaced. Throw all that into the pot, and that's why we started thinking about alternatives that would circumvent these issues, such as a Japanese rock garden with drought resistant plantings and little care required by tenants, or ground cover like dwarf jasmine that needs no watering once established - or so we're told. A last point. Yes, we've had plenty of grounds with both properties to issue evictions, but you know, who wants to do that unless really forced to? Last year the family that rented out our old home went into a divorce, the husband moved out, and the family thus lost their chief source of income because the mother was a stay-at-home parent home schooling her children - AND she had her crippled old mother living with her. Sounds like some kind of cliche, right? They ended up getting three months behind on rent, we even put their security deposit towards the payments (with the tenant's permission) to try and keep them afloat, yet reached a point eventually where we simply couldn't afford to keep making two mortgage payments and were virtually begging this woman to find a job to save us having to evict her. My wife and I just sat there totally stressed and virtually in tears, asking ourselves how we'd ever reached a point where we were going to be forced to toss a financially destitute woman, with her two young children and an elderly grandmother, on the street. To say it was a horrible feeling doesn't even come close, but thankfully her church eventually came to the rescue and she eventually dug her way out of the her precarious financial state. The fact she's letting the house virtually fall apart outside, and all the disingenuous excuses she uses to cover it, have worn down our last reserves of kindness, and we have already told her that three years is more than enough and that she needs to find another place to live in when the current lease runs out. Thanks again for all the response. It's been really enjoyable seeing what everyone has to say on the matter.

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.

I bought a condo before getting married. I bought my first condo (2bed/2bath) with the intention of getting a roommate to help with the mortgage. When we married, my husband already had a house, so I moved into the house, and we turned the condo into a rental. We had about $100 per month negative cash flow in the beginning. Many years prior to that, my then single husband bought a house in a suburb. Hated it, and bought another in the city and turned the suburban house into a rental. But, he remodeled the new house, ran out of money, rented out the house and he himself rented a small room to save money.... When he finally moved back into the newly remodeled home, he had many roommates to help with the finances. When we were first married, we built a mother in law apartment in the basement and rented that out. That helped with our expenses. We did not ask her to leave until my son was 2 years old. We then reclaimed the basement for ourselves. (You asked for stories and sacrifices...) We now have enough cash flow so not having rental income for a few months is not a big deal. This gives us the luxury of picking "good" tenants. We only pick tenants who are professionals with good jobs and stellar credit and rental record. The longest we have had vacant rental is about 3 months. We are also in an urban environment where many young professionals cannot afford to buy due to the housing price. Most houses in a suburban subdivision do not make a good rental, unless you can make the rent 1/3 or less than the monthly mortgage of buying the property. (now days, that may not be true because of the downpayment requirements have gone up for buying a home...) Like most everything else in real estate, it's location, location, location that determines the rentability, the amount of rent, the type of tenant etc. We have never needed to go to section 8 route. My condo is very close to the University and Medical school. We almost always have medical residents as tenants(currently dental student and the working spouse). We don't rent to undergrads. They have "no income" and do not qualify in our minds. Our suburban house is near many tech firms in the area, and we tend to get techies with well paying jobs living in the house. melle sacto, not only do you need to have enough money to get through prolonged vacancy, you need to be able to deal with unforseen emergencies quickly. These rentals are your investments. You don't want to do anything to devalue that investment. For example, we had a leak in a very old bathroom. We decided that it was a good time to update the bathroom rather than "patch" fix the bathroom when the tenants moved out. The tenants move out when they want to not when you have the money to fix the bathroom. Like any other business, you need to have available capital when you need it. In order to rent the property quickly, you need to make it look fresh with regular painting, yard maintenance, deep cleaning, etc etc. The most recent tenant turn over uncovered very old sliding glass doors that were not closing property due to age and settling etc. It was noticeable enough and would have detracted from the house from the potential tenants point of view. Again, we had to spend a few thousand $ to get them replaced. This is a regular part of being a landlord. We will probably get one more rental, either a duplex or a quadplex. (our next door neighbor probably has 10 houses/buildings or more) Anything larger than that, we are not willing to manage ourselves. We call trades people for just about everything that needs to be done. It is not worth doing it ourselves at this point. Initially, you will have to do everything yourselves, ie painting, yard work, cleaning, etc. If you and your husband are handy, you will spend less money versus calling someone in. Again, this is not on your schedule but the house's schedule. My brother has a dulplex that he rents out and also the house my parents willed to him. He too had to spend money when things happen. (both of our rentals needed new blower for the furnace this last winter.) We just laugh when these things happen.... Unlike calliope, I consider the risk I take with the rentals as a controlled risk. I actually think it is much less of risk than money I put in the stock market. However, a rental has little potential for huge growth as would in some stocks. To be a successful landlord, you also need to learn your market. In some markets, it is not a feasible business model. For example, I would not buy a rental in a rural area with high unemployment. But I would buy a rental in an urban environment with a large number of transient well paid professionals. Rental properties are a part of our entire portfolio along with other more and less risky things.

We have a rental property at a ski resort in Colorado (townhome 1/2 duplex with a nice yard) that our DD manages for us. We bought it because we sold some timber land here and did a tax free exchange. It made sense for us because DD has experience in property management and her DH can fix anything. It's 2 blocks from our ski house where DD and her husband live full time and is in a relatively high end area and that commands pretty high rent. Although the neighborhood zoning allows short term vacation rentals, we prefer long-term, and DD checks out prospective tenants thoroughly. Our last tenants were just for 10 months while they were building a home, but we knew that coming in and we were immediately able to re-lease. We are not planning on selling anytime soon, but a recent sale of a slightly smaller place across the street, indicates that it's worth about $100,000 more than we bought it for 3 years ago and the rent account has a healty balance, despite having done some significant updates (new kitchen appliances and granite last year and new deck this year). We hire out lawn work and snow plowing. No HOA dues or mortgag, so those only ongoing costs other than property taxes and insurance. So far so good. For the first eight years we owned the ski house, we also rented out its basement apartment, but when we lost the 'best tenant ever' who stayed for six years, we decided to take over basement ourselves rather than risk a bad tenant in our own house. We just redid it completly and use it for extra guests. We will probably sell this house in the next year or so, so the new owner can decide whether to rent it out or not, but it will be a bonus because at current rentals even this 600 sq. ft. apt, would rent very quickly at about $1,000 - 1,200 per month. We did have a bad experience with a tenant in a rental condo we once had and grew frustrated for a while. Luckily prices skyrocketed by 50% in the year we owned it, so it turned out to be a really nice investment nonetheless.