When investing in rental properties, your ultimate goal is to make a profit, right? In a perfect world, this could be achieved by simply buying a property, putting it on the market, and finding a tenant. But, as with most things in life, it isn’t quite that easy. The keen investor knows there are a number of factors that must be considered every step along the way and we’d like to share a few of those with you.
1. Do the Math
You’ve found a property to buy and it’s listed at a great price. Great, you’re done! Not so fast – there’s much more to consider besides the listing price, monthly mortgage, and rental rate you’ll charge. Things like taxes, insurance, maintenance costs, occupancy rates, and HOA-related costs all must be factored in to determine if your investment will be profitable in the long run.
Your overall monthly payment is more than just the mortgage itself – it’s everything encompassed in the acronym PITI.