A rental property can be a lucrative investment. Before purchasing, however, do your homework by considering the following important factors:
Realistic Rental Income
Consult with real estate professionals to determine the ‘fair market rents’ applicable to your property based on location and property type.
Costs Associated with Ownership of Rental Property
There are fixed and occasional costs associated with ownership of rental property. Annual property taxes, mortgage payments, insurance and general maintenance are the fixed costs.
Funds must also be set aside for emergency/unplanned costs which may arise from time to time, such as replacement of roof, a/c or furnace, plumbing, replacement of appliances, etc.
Risks Associated with Rental Property
As with other investments, there are inherent risks associated with owning rental property, such as, but not limited to: high tenant turnover, vacancy, legal costs to evict bad tenants and excessive property repairs.
As with all investments, do your homework before becoming a Landlord.