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Good morning to all, and welcome again to Saturday Morning Home Repair - LIVE! A weekly gathering of professionals, DIY'ers, hopeless attempters....and the occasional redneck or two. Any questions asked can often be answered, or at least we can try to point someone in the right direction. At the very worst, always make sure to have the duct tape handy.

I've spent the past several months remodeling the apartment in my 2-family house after the previous tenants vacated amicably. With over 1000 square feet, this is nothing short of flipping a small myself, after the wife gets home from work, and I take care of a midget all day. After a month and a half of surviving only on 2-3 hour powernaps, burnout was inevitable and spectacular. And painful, as I started randomly falling off the ladder from exhaustion. And exceptionally short-fused - huge kudos to my wife for putting up with me (and letting me know when I'd reached my limit), and apologies to anyone I may have offended here.

Several regulars here have speculated on perhaps owning a multi-family at some point as a way to supplement income. In no way am I trying to dissuade anyone (come on in, the water's great!), but buying any house is a large decision; deciding to be a landlord can be as life-altering as having a kid. There are two distinct parts of that decision: the house and the tenant. Today, I'll just go into the house portion, with a later diary about tenant relations.

So let's play "Who Wants to be a Landlord?" in 3....2....1....Snausages!

Before jumping into landlord territory (or lessor, as the lawyers put it), there are a number of things to carefully consider. Just like any other house, you can't just back out a month after closing; the decision has a bit of permanency to it. In a previous life I ran a business park, so I had a decent idea of what I would be in for. Then again, an apartment is someone's home, not workplace, and there are distinct differences.

1. Know the laws. Laws governing tenant/landlord relations vary state to state in extreme degrees, and Massachusetts is one of the harshest towards the landlord. As an example, I can't charge my tenants for water usage...even though my monthly sewer rate was jacked by 60% last year. Nor can I use that for reason of rate increase. Meanwhile, when I rented in Florida some years ago, the water was just like any other utility - and they will shut it off in a heartbeat, as fast as cable.

Some may have seen an earlier rant of mine against MA laws, but there's a really good reason for it. Here, the landlord is assumed negligent, guilty, and responsible for anything and everything that goes wrong at any time. As such, everything I've been doing for the past few months is far more about defensively covering myself from liability - and it's documented in pictures. I've posted some here and will print them out, keeping the receipt for proof of date. If you decide to jump in the game, start reading up on the laws in your state until you know them inside out, backwards and forwards, and in your sleep; then decide rationally if you want to attempt it.

2. Be financially prepared. Sooner or later you will have tenant turnover for some reason. Whether it's a new job, change in life situation or eviction, there will always be times when it's empty with no rent being collected. Thing is, the mortgage bank doesn't care; they still need to get paid timely, lest the specter of foreclosure loom. Always be ready for a six-month vacancy. There could be a ton of repairs, no one you've interviewed that you would like to rent to, or a really soft rental market. Not to mention completely unforeseeable circumstance. A normal turnover should follow the half-and-half rule: half a month to fix and clean everything, at no more cost that a half month's rent. I had to shatter that rule - the previous tenants moved in 3 months after I bought this foreclosure and there was a ton to do - a great deal stemming from at least 15 years neglect.

Additionally, try to always be able to replace all appliances at the same time - including your own. Murphy's Law dictates that if one goes, they're all going to go (if I ever find this Murphy character, he's in for it). Preferably you want to have cash saved for such an occurrence, but at the very least make sure you have a sufficient credit line in place. By law, I have to provide stove and refrigerator; if they crap out, they need to be replaced in just a day or two.

3. Know your house. This is especially true for any limitations that an older structure may have. Mine is 100 years old, with texture over wallpaper over horsehair plaster over laths on studs. With all that material in the way, stud finders have canipsion fits - they think everything is a stud. Hanging pictures requires a good ear or 3M Command hooks (preferred). It's also a second floor walk-up, so renting to someone in a wheelchair is obviously not going to work. Part of the time spent in the vacant apartment has been learning where every nook, cranny and flaw is, fixing and upgrading everything I can...but learning what simply has to be lived with.

4. Know your rental market. The object of the game is to have the rental income offset the mortgage, if not cover it completely. To that effect, read up on Craig's List, local paper listings, bulletins in local stores to find out what you can reasonable get monthly. If you charge too little, you may find the scum of the earth coming out of the woodwork. If you try to charge too much, you'll just wind up with an unrented apartment....which defeats the whole purpose. Always try to get first, last and security deposit (where allowed by law), but remain realistic on the monthly figure.

5. Never over-improve. One of the biggest mistakes new landlords make is to add things they would like to see in their own house and assuming they can get more rent for it. No matter what you do, the local market isn't going to suddenly explode. Local jobs still pay the same, the cost of gas for a daily commute isn't suddenly free, and it's unlikely some lottery winner is going to rent from you. They would just buy their own house, wouldn't they?

On top of that, anything you put in must, from that moment on, always function perfectly. Whether it's a skylight, a dishwasher, garbage disposal....whatever you put in must remain in working order at all times. And remember, once it's in, it can only come out between tenants. Otherwise the apartment is no longer as it was when they signed the lease...and the lease is void.

Since owning a rental property is akin to a small business, use a business-type algorithm to decide if it's worth the improvement. Take the monthly rent expected, and divide in half. From that, deduct ongoing monthly expenses; water, appropriate portion of taxes, estimated exterior lighting cost, monthly heating costs if applicable, etc. Now take that greatly diminished number, multiply by six, and that is the most any improvement should cost, in totality, in any given year. At that point, you may find it best to NOT do the improvement, but save the money for inevitable repairs.

6. It's not your house. This may be the single hardest thing for new landlords to wrap their head around. You pay the mortgage, do all the repairs and upkeep....but at the end of the day, you don't live there.

To that end, avoid the latest paint color trends like the plague. I chose a wall color recognized by the National Historical Society to make sure it would be available at the next tenant turnover - always plan on refreshing a room or two. Additionally, the ceilings are now all flat ceiling white (as opposed to diarrhea-colored semi-gloss), and all the trim and doors are white. The end result is the whole thing being kind of bland and vanilla...which I can repeat easily in a decade's time. Just watch "That 70's Show" and look at the wallpaper for proof.

Once you have a signed lease, you can't just go in at any time unless there is some type of emergency repair (like a broken pipe). Even though you've slaved over it for weeks on end, you may not see the inside again for (hopefully) years, and anything can happen in the meantime. Which brings me to today's final consideration....

7. Idiot proof the apartment. Nobody wants to rent to a blithering idiot. No one wants to have a day where you get served divorce papers, fired from your job, and immediately hit a liquor store on the way home. Everyone has horrible days, and occasionally that may mean getting 3-sheets to the wind plastered, stumbling everywhere, and passing out cold on the living room floor. I would always rather have someone get tanked up at home and not have to worry about driving...but they can do damage to both the place and themselves.

My previous tenant and I were friends, and decided to get ferschnookered one night on Irish Whiskey. Neither of us normally have more that a nip or two of hard stuff, and this got us completely wrecked. The next day he called me with some bad news. While the room was spinning out of control, he leaned on the wall-mounted bathroom sink to steady himself....with all his weight. Needless to say, that hung-over day was spent mounting a new sink. He didn't mean to, but it happened.

To that end, there is now a pedestal sink in the bathroom. Every door closes easily, and has a doorstop. Not the spring-on-the-baseboard type, as I've tripped on them myself, but the hinge style. Every wall is patched, absolutely nothing leaks, everything is installed as solidly as possible. One of the last things to do is install new blinds in the windows. If you've ever put up blinds, you've probably wondered who would actually use the center metal holder. I call it the dummy bar, and they're going up. Even after all I've done, I know a prospective tenant will have a move-in punch list - it's the nature of the game. At the least, I think I've minimized the possible length. Then again, that punch list can tell you a great deal about the type of person a tenant will be.

That's for a different diary, though. Dealing with tenants is a whole other ball of wax, with it's own pitfalls. Again, it's not my intent to dissuade anyone from buying a multi-family to collect rent, but hopefully reading this will give an idea of what's involved.

OK, the floor is open! Sorry for the long, non-pic diary - but thought it was a good topic. Grab a cup of ___ and start the show!

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