Purchasing an income property is a big decision. In some cases, it can be a great investment, but there are risks involved. Here are some things to be aware of:
1. You won’t get rich quick.
Or maybe not at all. The real estate market can be unpredictable, so make sure you have realistic expectations about the potential return on your investment.
2. Income properties cost money.
As a landlord, you will likely need to pay for maintenance, taxes, cleaning between tenants and vacancy time. Set money aside for emergencies.
3. There are rules as to what can and cannot be rented.
Make sure you check that local zoning regulations allow renting before buying a property you plan to use as a rental.
4. Insurance can be expensive.
Insuring rental properties can cost much more than insuring an owner-occupied home. Get a quote first, so you know what you’re getting into.
5. Maintenance workers will save your life.
A reliable and talented repair woman or man is vital. When the need arises, it’s important to repair items as soon as possible to prevent further damage. Plus he or she will be the one who runs over when the fire alarm starts beeping at 3 a.m.
6. Income properties should operate like a business.
Start a separate bank account for the property and keep paperwork for things like maintenance separate from records for the property you live in.
Is buying an income property the right decision for you? Contact a RE/MAX agent to weigh your options.