Would you buy a rental property? Today’s buyer’s market is a great opportunity to do this, but check these three things first:
1. Do you have enough reserves to pay both mortgages without a renter? I usually recommend that you have enough to afford the house for six months without rental income. This will make sure you have time for any necessary home improvements, and to survive in case finding a renter is hard.
2. Do you have patience? Owning a rental is a lucrative investment—but it’s going to take a lot of work, time, and money at the outset. Don’t start renting at a time when you’re expecting big life changes or a busy career time.
3. Do you have a REALTOR®? Renting can be even more complicated than selling your home. You’re going to want an experienced local real estate professional to help you organize things. He or she can also advise you on how long you can expect to wait before finding a renter.
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