In my last post I discussed the ins and outs of investing in real estate by renovating and re-selling properties to realize a short term profit. Today let's look at the concept of investing in rental properties as a longer term strategy.
In recent years, many a client has come to me considering this avenue. Ups and downs in the stock market, high housing inventory and low interest rates can make income producing properties a good option. If you are considering the purchase of rental property, here are a few things to consider.
- How much money do you have to invest?
- What are your objectives? (i.e. long term equity growth, short term cash flow, etc.)
- Will you self manage the property or properties?
- What are the tax ramifications of your strategy?
- Is your spouse or partner on board with the plan?