Am I ready to be a landlord?

2011 is shaping up to be a great year to buy real estate, especially in markets that have shown double digit drops in value over the past 2-3 years like Phoenix, AZ. Some of you will be looking to purchase your first home to live in and others may well be thinking that now is the time to purchase a rental home. If you all into the investment home category of buyers you will want to ask yourself this question "Am I ready to be a landlord?"

Many potential real estate investors think all they have to do is buy a home, get a tenant and collect rent checks. There is much more to than that. Here are just a few things to consider if buying a rental home is on your to-do list for 2011:

• Am I paying cash or getting a loan? Keep in mind if you are getting a loan to purchase a rental home you must be able to qualify with not only the rental home payment but also your current home payment if you have one, plus any other monthly payments such as credit cards and car payments.
• Do I have any cash in reserve in case the home is vacant for any length of time or the home needs any repairs? Often times new investors don't plan ahead and have contingencies in place for unforeseen circumstances like a major repair or a tenant breaking a lease. 
• Is the rent sufficient to not only cover the house payment but also property taxes, insurance and maintenance? Don't forget that the mortgage is not the only monthly expense for a landlord.
• Am in this for the long haul? For the most part, the days of buying and flipping homes in hot real estate markets is behind us. Most investors should be prepared to buy and hold a property for 5-10 years in order to make a profit on the home.
• Is there a good pool of renters in the area which I am looking to buy? We've all heard the term when buying real estate, it's all about LOCATION, LOCATION, LOCATION. The same is true when looking to buy a rental. You want to make sure you are buying in an area that supports a good rental market. Close to freeways and commuting distance from major employment centers. Good schools, shopping and other amenities close by.

These are just a few of the items that potential real estate investors should consider in 2011. Now is a great time to buy real estate, either as an investor or as an owner occupant. Make sure to consult a real estate professional as well as a licensed mortgage consultant before making any buying decisions.

Make 2011 a prosperous year.

 Joe Reed has over 20 years experience in the mortgage industry. Please call Joe Reed with Amerifirst Financial today for any questions regarding home loans in Phoenix, AZ.