I used to rent out an apartment in my two family home. Peace of mind was more important to me than squeezing the last cent from my tenants. Here's what I did:

- I placed a Craigslist ad in March/April for a lease starting on September 1. Those who responded were in the know, and smarter than the average.

- I kept the rent slightly below the market value, and did not charge a broker's fee. I was able to screen for the tenants with good references, and of my liking.

- For the good tenants, I renewed their leases in March/April for September 1, without a raise in rent.

- When a tenant moved out, I returned their security deposit with interest. I checked the market value again, and placed an ad setting the rent slightly below it.

- The apartment was always rented out, and was never vacant.

For a few decades, I was blessed with great tenants. Many only moved out when they had to relocate. I only need to find new tenants every few years.

Advantages for renting an apartment from an owner occupied house:

- There is likely no broker's fee.

- If there are other apartments in the building, those tenants are unlikely to be rowdy.

- The building is likely to be well maintained.

- If repairs are needed, contacting the owner is far easier than a management company.

- Better probability of a parking space.

- Driveway is likely to be shoveled soon after a storm.