So you want to be a landlord

Watching fire trucks with their sirens blaring pull up in front of your investment property can take the romance out of being a landlord very quickly.

Lisa Budnick saw that happen twice to the five-unit building she owned in the city's Spring Garden neighborhood, one of three investment properties she acquired since 1999.

"As you run down the street, you're saying to yourself, 'The heck with the building, there are five people whose lives I'm responsible for,' " Budnick said.

Budnick sold the building in December 2006, and, while admitting that owning just two has cut down on the emergency phone calls from tenants, she still looks at landlording as much as "nice being able to give people a home" as an investment.

There are those who become landlords out of necessity, when the property they own won't sell or they inherit from a relative a house they'd never think of living in.

Then there are others who think the idea of owning investment property is "romantic," or at least altruistic, in that they are providing decent, affordable housing to young people starting out in life or those who might not yet be able to afford homes of their own.

It works out to be a love-hate relationship at worst, but for many landlords, there is great pleasure in doing things for other people and, in many cases, watching your investment pay off.

"I really love dealing with people," said Michael R. Lubell, 53, of Queen Village, who owns one two-unit rental next door to his house at Front and Catharine Streets and a three-unit one in Pennsport ("just six blocks away in case of emergencies"). "I look forward to a vacancy so I can renovate. I give my tenants cookies at Christmas.

"The big property investors I deal with as a real estate agent don't want to even know their tenants," he said. "That isn't me."

One of Budnick's buildings had two apartments above a laundromat, and she rented them to artists - a group not known for having the deepest pockets, but who have often turned out to be the most conscientious and reliable tenants.

Still, it's not all peaches and cream.

"A couple of weeks ago, one of my tenants broke the lease to buy a house," Lubell said. "It was completely unexpected, and I wasn't very happy when it happened."

"I've had great luck and not-so-great luck with tenants," Budnick said. "When it comes to people paying the rent on time, I think it is about 50-50.

"Being a landlord sounds exciting until you look at the numbers. You become landlord and landowner, meaning that you're the one who will be fixing the toilets. Still, no matter what happens, I always think it is going to be OK."

Both Budnick and Lubell are real estate agents, but they would quickly agree that acting for clients in a sale is much different than being a landlord.

Robert C. Figueroa is not a real estate agent but was a public-school teacher in Philadelphia in 1996 when he decided he "needed a little financial security" and began buying rowhouses, duplexes, and small apartment buildings in north-central Philadelphia - about 20 in all.

"I'm very people-oriented, and I love helping them," said Figueroa, 57. "Sometimes you bend over backward and then somebody tries to stab you in the back, but many of my tenants have been with me for 10 years, and they appreciate a quick response to problems and my keeping in touch with them to see how they are."

Author Christine Hrib Karpinski's immigrant parents put her and her siblings through private school on their rental-property investments, and "sometimes my father would sit at the kitchen table and cry because of the things he had to deal with every day."

Karpinski, 40, of Austin, Texas, author of How to Rent Vacation Properties by Owner and Profit From Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment, followed her parents into the primary-home rental market.

"I learned from my parents' errors, and when I bought my first house at 19, I found being a landlord much easier, especially because by then, we could do background and credit checks," she said.

"I might have been just lucky, but I had tenants who would fix things themselves rather than call me, and wouldn't have even mentioned it had I not insisted on paying for the repairs," she said.

Lubell has struck the same kind of gold in his choice of tenants.

"At one of my houses, a tenant asked if he could refinish the hardwood floors, and when he and his friend were done, they'd done a job better than I could have ever hired any professional to do," Lubell said.

The same tenant asked Lubell if he could redo the kitchen, in return for keeping the rent at an affordable $825 a month.

"It was worth a lot more to the property than that, so I paid him the going daily contractor's rate for the work he was putting in," he said. "The kitchen was great, and it fits into my idea that the property I own and rent should be a place I'd be willing to live myself."

Budnick has let one of her tenants redo a kitchen, and given another "the liberty to paint."

"With that comes respect and trust on the part of landlord and tenant," she said.

Figueroa still does the vast majority of maintenance and repair work himself, although "over the years, I've been able to find contractors and other repair people that I can call at a moment's notice."

Still, when the heater goes in the middle of a cold winter night, it is Figueroa who is on the front line, as he is 24/7.

"By responding so quickly, by being there when I'm needed, I have developed relationships - friendships - with my tenants," he said. "So when I look at them, I don't see a number or a dollar sign but another person."

As Figueroa and the others attest, the personal touch usually works even when dealing with the more troublesome tenant.

"You ask them to take care of the property as if it were their own, you show them that you care about them when you hear they are sick and you call, they know you are interested in how they are and not just if the rent will be paid on time," he said.

"It is a lot like teaching school and dealing with your students," he said.

One day Karpinski looked at her books and realized that owning primary-home investment property wasn't paying all that much of a return.

"Not only did vacation property bring in higher rents per week than primary-home rentals did in a month, but the appreciation was much better, since there were only so many houses on a beachfront," she said.

A vacation rental on a beach?

"You want to talk about romance," Karpinski said with a laugh.