Are you considering purchasing an investment home? This could be a good idea if you want to diversify your portfolio to hold more than simply stocks and bonds. There’s plenty of stories about quick flips—buying a property, doing some renovating, and then reselling at a much higher price—dominating TV reality shows, however, renting has always been the core of real estate investing. This is mainly because in the past homes and properties have appreciated at a much slower pace. Renting can generate steady monthly cashflow much like classic dividend-paying utility stocks. If you see any price appreciation it’s a nice bonus.
Investing in a rental property is much different than buying a low-cost index fund. It takes a lot of work to choose the right property, maintain it, plus deal with tenants. You should think long and hard and be comfortable that you are prepared to put in the time that is required. Are you able to handle after-hours phone calls? What if the tenant doesn’t pay rent? Read More