Investing in rental real estate is something I have not done, but I am interested in this type of investment. With the current mortgage rates being at historic lows it seems that this might be a good time to invest in a rental property. Home prices are still much cheaper in most places than they were during the housing boom, but in many places the rent has not come down at the same rate. That should make for a favorable environment for owning a rental property.
When buying rental real estate there are some things to consider. Although I think now is a good time to buy a rental property that doesn’t mean it is a good deal in every market. And of course, you also have to consider whether the specific property you are wanting to buy is a good deal. To determine whether a property is a good deal you first need to know how much you could rent the property for. Then you need to figure how much it would cost to own the property. There can be unforeseen expenses when owning a property. Things such as a new roof or new windows from Roofing USA LLC should be saved for and expected.
This isn’t just the amount of the mortgage and insurance, but also the costs maintenance, repairs, taxes, and other miscellaneous expenses. Once you know these figures you can determine what a fair amount to pay for the property is and whether a specific rental property would be a good deal at the offered price.
Of course, there is a lot more to real estate investing than this. To properly learn about investing in rental property you need much more knowledge than you can get from a blog post. You need to do a lot of reading and it would be helpful to have advice from an experienced investor before you make your first deal.
You also need to consider the risks of investing in rental property. There is a possibility that your property could sit vacant for a long time making you no money while you still have to shell out monthly mortgage payments. It is also possible that you will have tenants constantly calling you with various complaints and maintenance requests. Hiring a good property management company can help alleviate that problem. You also have to worry about your tenants trashing the property. Buying some cheap landlord insurance can help offset that risk. Proper screening of tenants will help too.
Now is a good time to start investing in rental real estate, but you still need to do your homework before buying a property.