Saturday, 23 February 2019
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This Old House - Do-it-Yourself

4 Questions to Consider Before Investing in Rental Property

Written by Posted On Tuesday, 12 February 2019 07:37

Owning rental property can be a very good investment opportunity. It can also turn into a real hassle. If you're considering a venture in rental property, you should consider these issues before taking the plunge. 

Can I Afford to Cover the Payments? 
Most people with rental property use the monthly revenue to cover a mortgage payment on the property itself. That works just fine as long as the property stays rented—and as long as the renter pays on time. Before starting down this path, you need to do some calculations and determine if you can indeed float the property's mortgage and other expenses if it remains vacant or delinquent for several months. 

Can I Handle the Upkeep? 
Problems in a rental property that are invisible while it's vacant have a bad habit of emerging as soon as a tenant moves in. There will be many little repairs along the way, and if your budget can't pay someone to take care of them, you'll have to do them yourself. That means that fixing leaky faucets, replacing broken shutters, and unclogging drains will all be on your to-do list. 

Can I Make Hard Decisions? 
We often think of the decision to evict tenants as the most difficult one faced by property owners, but that's not necessarily the case. Choosing between several applicants can be very difficult, especially if you are conducting criminal background checks, credit reviews, and income verification. Dealing with these conversations is awkward for some people, so be sure you're comfortable with these tasks. 

Will I Want to Answer the Phone? 
The final point to consider is whether you are willing to have frequent contact with tenants. This is particularly important when you own multiple properties, but it will happen enough with just one. Tenants will call not just about paying rent or requesting repairs. They'll also be concerned about utility bills, smoke detectors, neighbor problems, and many other issues. You'll need to be prepared for lots of communication. 

Many people have used a single rental property to kick-start a strong private enterprise. They've done so by having (or developing) the skills and financial resources it takes to answer the questions we've just posed to you. Getting into the rental business can be the best move you've ever made, but staying out of it could be just as good. Know yourself and your finances before you jump in.

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Lizzie Weakley

 About the Author: Lizzie Weakley is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky Snowball.

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