Buying a house or an apartment is never the kind of decision to take on the whim of the moment – and this stands just as true in the case of those who want to make this purchase for themselves and for those who want to buy a house for rental.

What are some of the most important things to know about investing in a rental property? We have gathered them right below – so read on, find out more and be better informed before deciding on anything.


The Advantages of Investing in Rental Properties

Rental properties are still a very attractive investment for a wide range of people – and not without reason, as they show a pretty diverse array of benefits. For starters, you can buy rental property with borrowed money – which means that you don’t have to invest the entire sum of money right from the very beginning. As long as you do your math and as long as you charge rent more than the mortgage payments you have to make, you will be in profit.

Furthermore, rental properties are a relatively safe way to invest money as well. Your success will depend on a lot of factors (including where you buy the property, how you leverage it and how much money you can actually ask from the tenants) – but, as long as you do a thorough research, you stand all chances to make a profitable investment.


The Disadvantages of Investing in Rental Properties

Like everything else in the world, rental properties come with their own disadvantages too. First of all, you should know that you will have to dedicate some time not only to researching the best property and finding the right mortgage lender – but also to maintaining the property as well.

Also, keep in mind that your investment is not ready when your tenants move in. As a landlord, you have a lot of expenses to cover for, so make sure to have some money set aside for unexpected repairs and renovations, so that you maintain your property in a very good state.

Last, but definitely not least, please take into consideration that you depend on your tenants as well. Even one bad tenant can be bad for your business, so the best way to do this is by carefully selecting your tenants and by making everything really legal. This way, both you and your tenants will find yourselves under a contract you have to abide to and you will both be much more likely to keep your obligations.


Research the Taxes As Well

When calculating your potential Return on Investment, make sure to take taxes into consideration as well. Free tax calculators are great tools for this. Depending on where you live, you might be tax-free if your property is valued at more than your mortgage’s worth. Again, this might depend on a lot of factors, but the main point is that you have to be extra attentive to how much taxes you will have to pay for your investment property.