New! Take the plunge? First time landlord in Los Angeles!

[Jeffrey Waldron]

Hi I'm Jeff in LA. This is an update to a previous post 11 months ago. 

We're ready to move up from our starter home in LA's Eagle Rock neighborhood, and would like to retain our small home as a rental. The house is paid off and has been well-maintained (by us!) and seen big upgrades in the last seven years: new AC unit, sewer line, hazard removal, garage conversion (to office), etc. -- most of the major maintenance surprises have already happened. It's a nice little house in a nice neighborhood, we can likely ask $3,000/mo, and I believe we'll have our pick of clean, trustworthy renters (too optimistic!?).

I've never been a landlord. Many people I talk to for advice (outside of the real estate investment world) warn that it's going to be hell, that renters have all the rights, they'll trash the place, you'll end up in court -- somehow I'll be screwed and it's best to cash out, take the capital gains tax exemption and move along. I don't have a community of folks here who have done this, or a community of real estate investment-minded people to encourage this move. 

It's a gut move for me -- I've always wanted to be a real estate investor -- I like owning property and this cashflows immediately. I'd like to build towards a portfolio of a couple of income-producing properties. 

Why does everybody want to talk me out of this (financial advisor, in-laws, etc.)? Do we take this plunge? For a year or two and see how we do? 

-Jeff