This is a type of investment where you buy a property and rent out same to one or more tenants. Therefore, it is necessary you know that being the landlord; it is exclusively your duty to pay the mortgage, related taxes and overall cost of maintaining the said building. In order to cover all these expenses and make a little profit, especially while you are still paying the mortgage, you should be able to charge a reasonable rent. After the payment of the mortgage is completed, you will begin to enjoy maximized profit from your investment. |
Still on investing in rental properties, you should also know that the more you take care of your building, the higher the chances of such property appreciating over the years thereby leaving the investor with an asset that is worth more in the real estate market. This does not mean there are no downsides to investing in this particular market. For example, you might end up having a bad tenant who has no maintenance culture and within a short period, you find your property damaged which leaves you with more expenses than necessary. There is also a situation where the building lies dormant for a long time because there is no tenant. In this case, the monthly cash flow you are left with is nothing but negative since you will end up making the monthly mortgage payments from your pocket or another source.
Finally on investing in real estate, in order to enjoy the most of the investment, especially as a first time homebuyer, it is strongly advised that you buy properties that are situated in areas that are known to experience very low vacancy rates. Also, you should consider the type of individuals you rent your property to so that you don't end up spending money every now and then on repairs which are easily avoidable if you have good tenants. You should be mentally and physically prepared for the responsibilities of being a landlord and in a case where you don't see yourself fit for all it entails, then you should consider getting the services of a professional property manager who bears these responsibilities on your behalf, for a price though.
The author is a well Known Real estate Developer and contractor having immense interest and knowledge in property management, Turn key investment properties, Cleveland realestate investment, Rental Property Investment & much more hence also called to be as Property Guru.
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