One of my neighbors became a new landlord last year. He bought 2 preconstruction homes with the idea of turning them into rentals and having them pay for themselves. This is a good plan if you have worked out all the details but a quick way to problems if you do not have a professional working with you and an exit plan if things don't work out.

  His story is that when he set the rental amount he worked off the current payment. Now a year later the taxes on the properties have been assessed and are costing him another 250.00 per month. The interest rate on his adjustable mortgage has also went up and is costing him an extra 80.00 per month. This is costing him an extra 330.00 per month that he had not planned on. By the way he never planned on having any vacancies and you guessed it one of the home has been vacant for 4 months.

  This past week the lender filed for foreclosure on both homes as he can not and has not been able to continue to make payments on these properties.

  Please learn from this lesson that if you are going to get into the rental business do so with a plan and not just because the guy down street (me) is doing it and making money. 

  By the way Ohio is a recourse state and he may end up with deficiency liens on his primary home.