Well, not any more. It's 2009 - buying a house requires a down payment, and there are enough rentals on the market that it's not easy to get good tenants. Nonetheless, renters play an important part in Real Estate Empire 2 and in real life, as well - sometimes you have to buy a house when the price is right, even though it's going to take awhile to save up enough money to fully renovate it. This is where being a savvy landlord can be critical to being a success in the real estate market.
Renters will automatically apply to rent your houses as soon as you buy them. At that point you will need to decide if you want to reject them or not depending upon their rental history, condition of the property, your renovation plans and your cash needs. Unless you are planning a quick flip, you will almost always want to try and rent your house out, but you will need to decide how much risk you are going to take when looking at your potential renter's references.
There are a few things to keep in mind when starting out in the landlord business. The most important thing to know is that rents do not rise linearly with property value. A 3 bedroom, 2 bath house worth 500K is not going to typically earn twice as much rent as a 3 bedroom, 2 bath house in worse shape but worth 250K. On a related note, upgrades and repairs to houses become more expensive as the quality level in a house rises. A house with chandeliers and stained glass typically won't rent for a lot more than a similarily sized house with less expensive but equally serviceable fixtures.
Another important factor for the budding landlord to think about is that some renters in the lower end of the desirability scale won't want their houses fixed up too much. This is because rents are going to rise as the places are fixed up, and for some people the cost of their housing is going to be a bigger concern than whether everything is in tip top condition. Good renters come from all parts of the economic spectrum, but typically the higher the rent (and damage deposit) the more likely you are, as a landlord, to have your place well cared for.
You will notice that beside each rented house is a happy, normal or sad face - this tells you how your renter is currently feeling. Renters with a lot of income are going to want to stay in houses that are in good shape. Conversely, tenants without a lot of money aren't going to be happy if you make a lot of upgrades and their rent becomes more than they can afford. You can nudge a renter towards being happier by adjusting their rent to be low, normal or high relative to the value of the house they are renting. You can also use this mechanism to encourage a renter who is doing a lot of damage to a house to move along.
All of this is important to understanding how to play the landlord game. Sometimes you are going to want to fix a house up for potential sale while still renting. If you are doing this then you may want to drop rents to hang on to good tenants. Conversely, you may want to jack rents up on a troublesome tenant who is causing you a lot of repair bills, partially because this will help cover your bills with this tenant, and partially because if they move on you might be able to land a better tenant.
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