Update:
We've got four rentals... today at least. The first one we bought just sold. We discovered the tenants were absolutely trashing the place. The woman had moved, and left her son and his girlfriend there. Don't know if the GF was still living there, but the nice little 1914 vintage Craftsman looked like a squatter's den. Overflowing ashtrays, empty liquor bottles everywhere, a pit bull in a cage ion the living room (no pets allowed, naturally), long term unreported water leak ruining part of the wood floor. Locks all changed (NOT allowed), original 84" door broken and gone, and was replaced with a cheap 80" slab and a couple of 2x4s to fill the gap - sort of. We terminated the lease, totaled up the damages, and decided to just sell it as-is rather than putting about $20K+ into repairs and refurb. The renters didn't do all of that; some of it would be needed updates like windows and floor refinishing, but they did about $8K worth of damage. I'm billing the lease signer for that, but no real expectation that she pays any of it. I'll send it to collections and anything we get is a bonus at this point - other than that, it's a tuition payment. So, we got the "landlord horror story" experience.
So why am I not crying in my beer? We bought the house, it produced rent income for over 4 years, and we're selling it as-is for about $25K more than we paid for it. After the smoke clears we'll net roughly 36.5% gross profit over that period, after expenses, commission, and all that. Unless I did the math wrong, that works out to a pretty respectable 7.6% annualized return. I'm not going to complain too loudly about that. We sold to a young couple getting married next month who want to move in, refurb it, and start a family.
So, lessons learned. We're inspecting houses regularly now, inside and out. We've finally got tenants in the last one, so things are looking pretty good.
