If you've got enough income to make a serious investment, and you actually know how to swing a hammer, consider getting a rental property.- Plan on putting at least 10% down, but 20% is better and will make it much easier on the monthly payments.
- Even if it only rents for $900 with a mortgage of $1,300, it may still make sense with the appreciation of the property, assuming you can afford the payments.
- Always keep 6-months payments in reserve. Never know when you'll have a protracted eviction and $5,000 or more in repairs. If you can't swing it, you'll be putting yourself at risk.
- If you buy an ugly house, you can get a better deal, do much of the work yourself, and save a fortune, if you're smart about it.
- Be very careful about who you rent to or you'll lose more than you can imagine, and more quickly too. I lost $10,000 in damages and four-months of rent from one tenant. Very bad situation.
- Buy something close to home so you can regularly swing by for a drive-by checkup, and so you're close enough to do the repairs.
- If two or more years pass and you don't like it, sell the place and call it a day.
- In the unimaginable event of an ugly spousal split, you'll each get one house. That's better than just getting a car with big payments.
