The decision to invest in rental properties and act as a landlord needs to be carefully weighed. Because real estate is a long term investment, financing needs to be in place as well as information on the pros and cons of managing tenants.
Financing and Expenses
First, create a budget and decide if the property is affordable. A market analysis of rentals will be critical for making a purchase decision. A market analysis will provide information such as the amount of rent per month to reasonably expect to charge for the property. If the rent is priced too high, the property will sit empty.
Linda Seldonridge of Abbitt Realty in Hampton, Virginia offers this advice. “Know the rentals in your area. It is very important to know your local market and be realistic.” The rental market often follows the real estate market in ups and downs. If the real estate market is in a downturn, the rental market will be as well. Ask a realtor for a rental market analysis of several areas for consideration.
