Legalities of owning an apartment?

You will want insurance for the complex of course, but you will also want a personal umbrella policy of at least $1,000,000. I’d probably go for a $3,000,000 umbrella policy. Be honest with your insurer that you are getting it to protect you against liabilities that may arrise related to the apartment complex. They’ll charge you more, but if you ever need to use the policy, they’ll actually pay.

Yes, you want to use a lease contract. Most (all?) states have standard lease contracts. I would use one of those unless you hire a lawyer to write it.

There are two ways to determine costs, and you need to employ both to make sure your actually turning a profit. First, take your amortized monthly cost for the complex, add in monthly property taxes, monthy insurance, estimates of utilities that you will pay, an estimated cost for monthly repairs and maintenance of the common grounds, and add them up. Then add in costs for help with accounting and advertising. Are you planning to manage the complex yourself? If not, you need to account for the cost of a management service as well. Find out what the local occupancy rate is (usually around 0.90, but it all depends), and divide your total monthly costs by the number of units and the occupancy rate.

This gives an estimate of what each unit costs YOU per month.

Next, find out what similar units are renting for in your area. The difference between these two is roughly what you can expect to make per unit. Now just multiply by the number of units to figure out what you’ll make per month, and then decide if this is really a good investment or not.