I am a landlord. My first thought upon reading the OP is that a lot of people really don’t have a good idea what renting a property is all about. Renting isn’t just letting someone else live in your condo (or house or whatever) while you sit back and collect the rent.
The reality of renting is that it is a business, and you have to treat it like a business. If something breaks, it’s not the tenant’s problem. It’s yours. You own the property. If there is a plumbing issue at 9 pm on a Sunday night, it’s your problem, and you need to take care of it NOW. If the air conditioning or furnace craps out, it’s your problem. It’s something that you need to be actively involved in. It’s not something that you “move on” with and just collect rent with. You have to keep good records. You have to manage the finances. You have to handle any and all problems that come up.
As for your tenants, it’s always a crap shoot. In general, if people really have their life together, they buy a property. They don’t rent. While there are many exceptions, renters in general tend to be living paycheck to paycheck. There’s a reason they are renting and not buying. You can do all of the checking before hand that you want, but you still never know what you are going to get.
Some people may seem nice, but they may think that all landlords are greedy assholes who just prey upon good honest hard working Americans. It’s the landlord’s fault that they don’t have enough money. It’s the landlord’s fault that they are late with the rent this month. They will screw you over any chance they get.
If you are in a big city area, you are much more likely to end up with tenants who don’t care and will trash your property. So where your condo is located makes a HUGE difference. If you are in a nice area where people in general take care of things then renting could work out for you. If you are in a big city and renters tend to trash apartments and skip out on the last few month’s rent, then renting might be a nightmare for you.
I am a reasonably handy person. I single-handedly turned a 3 bedroom house into a 5 bedroom house. Whenever I turn over an apartment, I go in there expecting to hang new drywall and fix other major issues. I have been pretty lucky with my tenants so far, but you never know what they are going to do to your property. I have always had to do some repairs. I have yet to be able to just paint and call it a day. If you have to pay someone to do all of your repairs, that is probably going to get very costly. At the very least, you usually have to paint whenever you turn over an apartment. If you can do it yourself you’re talking a couple hundred bucks for paint and supplies. Pay someone else to do it and you’re talking a couple thousand.
The last apartment I turned over, I had to replace the carpet and patch some holes in the walls (the tenant had screwed something to one of the walls). As soon as the new tenant moved in, the fridge, which had been working fine for years, suddenly crapped out, so I had to buy a new fridge. The fridge was just one of those things, and you need to be ready for any sort of “just one of those things” that comes up. Your tenant can’t wait a month because you don’t have the cash to get a new fridge now. You need to be able to spend $15k to $20k at a moment’s notice, just in case. If I had needed to pay someone else to lay the carpet and patch the walls, then the total cost of turning the apartment over would have easily been half a year’s rent. It’s difficult to make a profit doing things that way.
Here is an example. Let’s say your condo is worth $150k, which is about typical in my area (they go from about $50k up to about $250k typically). Apartment rentals in my area are about $1k on the top end, so you charge more than $1k in rent then you won’t get any tenants. Let’s say your total taxes on the property are $4k per year. If you have to pay someone to get the condo ready to rent, that’s another $3k, and let’s say you have $1k in miscellaneous expenses. The condo sits vacant for 2 months before someone rents it. You collect $10k in rent. You pay out $8k in taxes and other expenses. Your $150k investment is earning you $2k per year, and that’s only as long as no major expenses (like a new fridge) come up. You are almost better off selling the place and investing your money elsewhere.
This isn’t to say that you can’t make money off of a rental unit. I happen to make enough money that it’s worth my time and financial investment. But you need to run the numbers like this before you even consider renting out your property. If you haven’t run the numbers, then you are very likely to fail as a landlord. If the numbers end up being as miserable as my example, then you won’t be very happy being a landlord. If the numbers are much more in your favor, then maybe it’s worth considering.
The higher rent that you charge, the more difficulty you will have finding tenants and keeping them. Charge lower rent and treat your tenants well, and you’ll attract longer term and more stable tenants. You won’t make as much rent, but at the same time you’ll have fewer months where the apartment isn’t rented and isn’t making money. Charge too low of a rent though and you’re basically losing out on money every month that you could be making. No one will tell you how much to charge for rent. You need to figure out these things on your own.
You need to know what the rental market is like in your area, and not just the typical rental cost. In some areas, there is enough of a demand that apartments rarely sit for more than a couple of weeks before being rented. In other areas, it’s not uncommon for a property to be vacant for a few months. You need to factor in turnover time in your financial calculations.
As a landlord, you will be required to learn all of the applicable laws in your area. There are forms that need to be filled out. There are forms and pamphlets that I am required by law to give to my tenants when they move in, and there are forms that I am required to submit to the local government. A friend of mine also happens to be a landlord, and in his area, all landlords have to be certified in lead paint issues. There is a class that he has to take, and the training is good for some number of years.
You will need a different insurance policy, typically a special landlord policy. This policy will probably have a bunch of requirements that aren’t necessarily a part of your current condo or homeowner’s insurance. For example, while having a fire extinguisher is a good thing, most homeowner’s policies don’t actually require one. My landlord policy requires fire extinguishers in all units, and has specific requirements about where those extinguishers are located. Your existing smoke detector might not be adequate. Some areas (not mine) require smoke/carbon monoxide detectors that are AC powered and have a battery backup.
No one is going to give you a nice handy checklist for everything you need to know. You need to research it on your own. If you are lucky, your local government will have some sort of resource (web page or brochure) that spells out at least most of the local requirements, but you still need to be familiar with federal and state laws. If you miss something or just don’t understand something, you can be fined, and failing to know about a particular law or requirement is not an excuse.
Being a landlord is a lot to get into, and it’s not for everyone. I have a friend who was a landlord and got out of the business as it was more hassle than it was worth to her. On the other hand, I’m very happy being a landlord and I don’t regret getting into it. YMMV.
As for actual condo rules, if I owned a condo, I wouldn’t want my neighbors renting out their units. It’s too big of a risk, with the likely result that your $150k investment will soon only be worth about $75k.
You also need to check out the local zoning laws and requirements. Some areas actually limit the number of rental properties in a particular area so that they can spread things out and keep things reasonable for infrastructure purposes.
You need to check out other local laws and regulations as well. There could easily be a lot more involved in this than just changing the condo rules. There could also be some significant tax considerations.