Investing Rental Property. If you get an anxiety attack just thinking about dealing with tenants, then it would be worth paying the extra money to have your lawyer check potential tenants out, or to hire a maintenance service.
There are many maintenance services out there, that will do everything from keep the property up, to collecting rent, chasing rent and whatever you need. This is a good idea, if you don't live anywhere near the investment property, and you don't relish getting the 2am calls from a tenant whose light bulb has burned out.
But, the downside to that, is they will take a percentage of the rent. If you have a good rental property investment, and not much expenses, this might be the way to go. You can interview many of these companies and get a feel for them, and find out just what services they have.
Rental property investments, can be a good long term investment. In this market, with the economy trying to get back on its feet, the days of flipping a house for thousands in profit, are hard to find. But there are many people, who do not want to purchase a home. They either have jobs that move them around, or they just don't want the responsibility of a home. So, there will not be a lack of tenants.
That being said, you still need to find a good location for your rental property investments. You will get a larger pool of potential renters and tenants to choose from, if you stick to the city or town, on town services (water, sewer, cable etc), near public schools, parks and shopping.
If you are trying to rent a rural property, it may take longer. You will have to find tenants that are capable of dealing with septic systems, wells, upkeep larger properties etc. This is great if you have a tenant with a horse or animals, but the pool of tenants is smaller.
The less that can go wrong in a rental investment property, the better. If you purchase a house to rent, then you want to make sure all the electrical and plumbing is up to code. It is well worth the investment to have these checked out by qualified trades people. These can be hidden problems, that don't come to light, until that first night the tenant moves in.
If you don't know the history on the house, which was in our case. It was a foreclosure, and was sold "as is condition". Therefore we have done many upgrades and renovated the kitchen and bathroom to avoid too many problems. We did not go overboard, just a nice clean bathroom and kitchen. I want it to be in such good condition, that I would move in and be comfortable.
A friend of mine, who invests in real estate, especially rental property investments, will renovate a house or apartment, and will move in for a few days, and see just how everything works. This way she knows that the shower/tub is good, kitchen is good etc.. No surprises for the tenants or her as the landlord.
If you want to collect the higher end of the rental income for the area, then you have to make the place nice. People do not need things going wrong, or bad workmanship or they will get frustrated with you as the landlord.
You don't need to be best friends with the tenants, but you do need to be on good working terms. Make sure you get a good lease, and pay the money to have a background check done. If you choose to have your renters pay their own utilities, give them the number of these utilities and then contact the utilities yourself, and have them put your name as a backup to call if there are any problems.
This way, if they are not paying the hydro, they will contact you, so that your house does not get cut off, and you can hopefully rectify the situation.
This is worse case scenario. If you do some good background checks you should be fine. There is always a risk with any investment, but rental property investments, will pay for themselves over time, and give you an income.