Are you stuck with a vacant property? Is it bleeding you dry? If you’re thinking about renting the property as residual income, be sure you’re ready to take on the role of landlord. Think it through carefully.
You might be wondering, what’s so hard about picking up a check every month?
It’s true the buy and hold approach comes with a few benefits. As mentioned, one is a steady income stream. Ideally, the rent payment will cover your mortgage payment and a little more. What about your property taxes? And HOA dues need to be taken into consideration as does insurance. If you’re lucky, maybe there will be a little something left over.
You say you don’t mind just breaking even as long as expenses are covered? You’re okay with renting and building equity in the property since real estate usually appreciates over time. That’s true. It’s likely the longer you hold onto the property, the more money you can make in the long run.
That’s well and good as long as you can outlast the market dips and sitting out market downturns until conditions improve—hopefully while continuing to collect rent.
By the way, you’ll do more than collect a paycheck on the first of the month. There will be ongoing maintenance issues such as clogged toilets and broken windows. There could also be rodents.
Your fix-it list can be like a second job. Many rental property owners are stuck with handyman duties. Yes, you’ll do much more than collect a check on the first of the month.
You can hire a property manager, but it comes at a cost, approximately 10% to 12% of the monthly rent payment. The most costly thing of all is, while you’re waiting 30 years for the property to appreciate, your capital will be tied up and you could miss out on other investment opportunities. Is it worth it?
Instead of holding onto a vacant property and renting, why not sell to a real estate investor? An investor is usually connected with cash buyers who will take the property off your hands, sometimes in a matter of weeks or even days. You get to walk away from the hassles. All you have to do is figure out how you’re going to spend your money. Click here to learn how to qualify real estate investors.