What Being a Landlord Entails
Can you — should you — become a landlord? You will have to be just as responsible owning a two-family house as those landlords who run large apartment complexes would be. If something is broken, you must fix it — and promptly. You may be able to put up with a roof that leaks because money is too tight for a roofer right now, but if the tenants are on the top floor, you will have to come up with the cash for repairs immediately. This is not just an ethical point; tenants are entitled by law to premises that are habitable. Any serious lack of repairs that leaves those renters without heat, light, or water, or with rain leaking in through a damaged roof, can result in a call to the local landlord/tenant enforcement agency and/or withholding rent.
Generally, those who own and live in buildings with three residential units or less (almost always houses that have been divided) are exempt from many local regulations that govern landlords of larger properties.
Smaller repairs are a different story. You do not have to drop everything to fix things not basic to the apartment and that do not contribute to making it fit for habitation. You can add minor repairs — an outlet that does not work anymore, for example — to your list and get around to them within a reasonable length of time.
If rent control is in force where you live, you will have to adhere to those regulations. Rent-control regulations are set by law, and they restrict how often you can raise the rent and by how much.
In a community with rent control, you may find yourself carrying Mr. Second Floor, who pays $200 a month for an apartment that could go for substantially more. In that event, be sure you count on only that $200 a month as added income and not on the higher amount you could charge if a new tenant were to move in. Mr. Second Floor could be there quite a while.
Some local laws protect the elderly from having to move when a new owner takes over a building. Be sure you are aware of what the laws are in your area.
If you buy a two- or three-family house with landlording in mind, you are entitled to ask for at least one unit (that is likely to be where the owner is living) delivered to you vacant. Have that point included in the sales contract.
Your local housing agency may say that a tenant living in the home with a lease is entitled to stay until her lease runs out. If there are no leases, you can ask that the whole house be delivered to you vacant, if you like, and you can start with new tenants. All of this is subject to local regulations, naturally. You may find you do not have carte blanche to do what you like just because you own the house.
Your state department of community affairs, your local property owners' association, or even your tenants' association can fill you in on your rights and responsibilities. Make the acquaintance of these folks before you start house hunting for a rental property so you do not sign on a dotted line and then learn about your restrictions.
