I'm hoping some of those with experience with managing rental units will give me some advice. My wife and I have decided to relocate to Enterprise, Alabama and build a house on a parcel we recently purchased. Were tinkering with idea of also buying a modest home to live in while our house is being built and then convert this home into a rental unit. Since I have no experience as a landlord I'm seeking some advice. The rationale behind having a rental unit is that I am hoping it will outperform an equivalent investment in a CD (I'm assuming for sake of comparison I could get 5 percent in CD -- an unrealistic assumption in this economic cliamate, but this is the standard I intend to use to measure the rental house against). The house I am considering is listed at $150K, built in 1984, 2080 sq. ft., and is in a good neighborhood and is in good condition. The realtor I'm dealing with assures me it will rent for $1400 per month, and that if I would accept $1200 per month it would rent immediately and stay rented. Having looked at the rental market in Enterprise, I believe this is an accurate assessment. If you're curious, here's the house: http://www.trulia.com/property/1069495676-306-Valley-Stream-Dr-Enterprise-AL-36330. My question for the landlording gurus is this: does this transaction make sense from your perspective. Am I likely to achieve my goal of a minimum 5 percent return on my investment (I intend to pay cash rather than finance the house), or will operating costs (maintenance & repair, insurance, property tax, etc.) eat all my potential profit, or worse, leave me with a net loss? As I am an utter novice when it comes to being a landlord, your comments/suggestions would be GREATLY appreciated!