Owning rental property can be a great source of steady income if handled properly, or it can be sold for a hefty profit to someone else looking for a long-term real estate investment if you are ready to move on and would like to make a larger, one-time windfall on the property. Deciding which way you want to go depends on several things.

Owning rental property offers some tax advantages and you benefit from capital appreciation as well. This can make the expense of property upkeep well worth it, but there are plenty of other issues to consider as well.

When you own rental property, you have all of the standard legal obligations of owning property, including taxes, the mortgage, insurance and any other expenses. In addition, you also need to be aware of the condition of the property at all times and maintain a safe living environment for your tenants. There is also the investment of time in managing the property – doing repairs, following up with tenants if rent isn’t paid on time, seeing that all rules are being followed, settling disputes…the list is a long one.

If you are considering selling your rental property, several things will influence the amount you can expect to get for it:

Are all or most of the units occupied? More people will be interested in purchasing if they know that the apartments have current tenants – it guarantees them an immediate income stream.

Have there been updates to the units in the last few years? Investors will pay top dollar if they know they won’t have to sink additional funds into improvements.

Are you charging your tenants a rent that is in line with the area? Buyers will want to know that when current leases or contracts expire, they will be able to fill the units easily.

If you decide you want to keep your rental property for a while, be sure you protect yourself financially and legally. Owning rental real estate means knowing how to handle tenant effectively, fairly and legally while preserving your own rights.

Never rent to anyone without having them fill out an application that includes references – then be sure to check those references! Verify their employment record and, if they’ve leased or rented before, talk to former landlords to see if they’ve had problems in the past. A credit check is also a good idea – if they are already having financial problems, you don’t want to be the next one on the list.

Always have a standard rental contract drawn up that outlines the rules and regulations of the property, the rent and when it is due, any deposits required and rules regarding landlord access to the unit, etc. Be clear about what repairs and maintenance are and are not your responsibility as the landlord and the rules covering changes such as painting the rooms, etc.

One thing many landlords skimp on that’s a serious mistake is insurance – you should be sure you have plenty of coverage for serious problems that may arise such as a leaky roof or a furnace break-down. Nothing ruins tenant-landlord relationships like the need for major repairs that aren’t quickly taken care of. Also be quick to address small problems or they will quickly pile up, giving the property a run-down appearance that will lower the rent you can charge.

Attention to detail is essential when you’re a landlord. Keep accurate records of all payments and follow up with in tenants who are late to find out the reasons. A few days here are there shouldn’t be a problem, but if someone is consistently late you may need to pull out a copy of their contract and review it with them.

Pay attention to what your tenants’ complaints are. If some of them consistently have problems with a particular neighbor in the building, you will need to have a face-to-fact meeting with the problem renter to see if there is a way to resolve the situation. When one person is making several others unhappy, whether it’s constant loud music or using others’ parking spots, it will affect the atmosphere of the whole building.

If you get to the point that you have to evict a tenant, consult with a legal professional. It’s always best to make sure you’re following the correct procedures and haven’t missed any steps before demanding that someone move out. You don’t want to give them an excuse to sue you later.

Caution, attentiveness, fairness and legal correctness should make your time as a landlord a profitable one.