The idea of owning a rental property can be very appealing. It seems if you play your cards right, that you can have income coming in every month with minimal effort.
While you may know you will have to spend some time supervising and maintaining the property, you could still have a considerable amount of time leftover. With a rental property for income, you may find yourself with the time you have craved to enjoy hobbies you otherwise couldn’t enjoy because you had to hold down a 9-5.
Here is what you will want to consider if you are thinking about buying your first rental property.
Know what you’re getting into
There are a lot of obligations that come with being a landlord. Make sure you consider not only the routine maintenance that will need to be done, but also the emergency maintenance.
Tenants can come up with the most unusual problems at the strangest times. Before you sign up for a rental property, consider what you will do about a leaky toilet at 3 a.m.
Location, location, well, you know
It’s the one thing we all hear about real estate. Location is everything. This mantra couldn’t be more accurate when it comes to owning a rental property. Consider the type of person you want to rent to, where that kind of person wants to live and the type of property they will be looking for.
There is nothing worse than having a rental property with no one to rent it. You could have a small house priced and ready for a couple of college kids, but if it’s nowhere near campus, you may not have any takers.
Consider the costs
There are a lot of costs that go into purchasing and maintaining a rental property. Of course, you will want to think about how much you will charge in rent and what kind of profit you will make on the property, but you will also need to consider other costs, including:
- Property taxes
- Insurance
- Maintenance
- Improvements
- Potential property damage
Owning a rental property can be a great move toward financial independence since you are in charge of the property and the money it makes.
