Investing in real estate comes with a bunch of benefits, which is why people have been taking advantage of this business move. One of the best benefits of a real estate investment is when you use it as a rental property, because it won't only provide you a stable monthly income source, there is also an equity appreciation and tax deduction. Overall, real estate investment can generally improve the investor's financial situation.
If you are a first time real estate investor, here is a guide for you to consider before you jump in to the business:
Budget
Budget doesn't only mean the amount of money you are willing to drop upfront (although determining your budget before searching is a major step). However, it's not only the initial payment that matters, it's also the amount of money you can afford to spend in case your rental property becomes vacant. While your mortgage can be covered by your tenant's rental bill, there are also months when your property has no renter.
So the point here is, choose an investment property which mortgage you can afford, in case its tenant leaves.
Communities
Each community has their own economic base, and you should consider this before deciding where to invest. For example, there are places where there are many students, employees, and millenial couples. In places like this, you can enjoy the benefit of easily finding a new tenant in case your current one leaves. Do consider the benefits of finding a new renter versus finding a long term tenant.
Cash Flow
It is important to study each of your prospect property's potential cash flow as some properties are more profitable or more expensive than some. Consider each property's mortgage payment, income potential, property taxes, and maintenance needs so you would know which property will earn you more income.