What Investors Need to Know About Buying an Income Property

November 21, 2022

Buying a rental property can be a great way to generate monthly income, which can be an important part of a retirement portfolio. That said, like any investment, it comes with risks, and it’s not a decision to be entered into lightly. There are several factors to consider before you invest in a rental property.

#1 Can You Afford the Investment?

The golden rule of investing is to never make an investment you can’t afford to lose. When it comes to a purchase as significant as property, that’s a difficult benchmark to clear. If you’re hoping you can rent the property for several years and then sell at a profit, you’re taking a significant speculative risk, especially in this real estate market.

Keeping it as a long-term rental property is safer, but there are still risks, such as:

  • Maintenance costs
  • Unexpected increases to your mortgage payments
  • Tenants who can’t make their rent payments

You should be able to comfortably weather financial setbacks like these if you’re going to invest in a rental property.

#2 What Is the Right Location?

As the old adage goes, when it comes to real estate, it’s all about location. With enough time and money, you can change anything about a property except where it is.

When it comes to rental houses in Toronto, rents have risen from one end of the city to another, but properties that are near a lot of amenities will command top rents. It helps to find neighbourhoods where there’s strong demand for rentals, although with nearly half of Torontonians now renting, there is pretty consistent demand across the city.

Location can also determine the types of tenants you’re going to attract, so keep that in mind as you search for a property.

#3 Take a Long-Term Outlook

If you plan to hold onto a rental property for decades, you’re more likely to turn it into a profitable investment. Even a property that’s breaking even from a cash-flow perspective can be a sound financial investment. You’re building equity, paying down the loan, and increasing the length of time you have to see appreciation.

Plus, once the loan is paid down, all of those payments suddenly become income.

#4 Consider a Landlord’s Responsibilities

Owning a rental property isn’t as easy as just collecting rent cheques every month. Landlords are responsible for maintaining their buildings and finding tenants. That means doing repairs on their own, calling and paying for contractors, conducting credit checks on prospective tenants, and showing units when they become vacant.

If you’re not interested in taking responsibility for another property, you can always hire a property management company, but that will take another bite out of your rental income. That said, it can be less expensive to hire a property management company than it is to sign a bad tenant.

#5 Can You Supplement Income with a Vacation Property?

With the evolution of short-term rental platforms, it’s easier than ever to make money from a second property or vacation property that you use personally. You can buy a cottage and rent it out for periods of the year to earn some extra cash without having to commit to a long-term tenant.

A rental property can be a good investment, but it’s not for everyone. Keep your location in mind, plan for the longterm, find out what a landlord’s responsibilities are, and always make sure the numbers work before you make an offer.

My name is Samantha Williams and i am a professional blogger.I have searched out different niches and brought up with amazing results. My posts are on famous blogs like f95zoneus.net. Contact me via e-mail- contactviralnews24x7@gmail.com

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

May 28, 2023
Dana Mecum House: The Wisconsin Compound

Who is Dana Mecum? Dana Mecum is one of the most prominent business personalities in America. He was born in 1954 in Monmouth, Illinois. Furthermore, he is better known as the founder of Mecum Auctions. He founded it in 1988. Moreover, Sir Dana Mecum also serves as its President. In addition, this famous businessperson is […]

Read More
May 28, 2023
Jamie Spears House: The Former Louisiana Home

Who is Jamie Spears? Jamie Spears, whose full name is James Parnell Spears, was born in Kentwood, Louisiana. Moreover, he is the son of June Spears and Emma Forbes. In addition, he is better known as the father of Jamie Lynn Spears and Britney Spears. He is also blessed with a son named Bryan Spears. […]

Read More
May 28, 2023
What are the Role of Data Visualization in Monitoring-Based Commissioning for Building Management

As our buildings become more connected and intelligent, the need for advanced building management techniques has never been greater. Among these techniques, monitoring-based commissioning (MBCx) stands out, especially when paired with data visualization. This powerful combination transforms how we approach energy efficiency and system optimization, offering solutions to persistent challenges in building management. Understanding Monitoring […]

Read More


Welcome to Urban Splatter, the blog about eccentric luxury real estate and celebrity houses for the inquisitive fans interested in lifestyle and design. Also find the latest architecture, construction, home improvement and travel posts.


linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram