|This villa only $158,000 positive cash flow of $1000-$2000 per month|
Kerry McAvoy, Psychologist (1991-present)
Answered Nov 5, 2016
Yes, I do earn an income from my rental properties.
There have been several lessons learned along the way.
The first challenge was to buy something that is profitable after mortgage and expenses. That often depended whether the real estate at the time of purchase was a good value due to it being a buyers vs sellers market. Of course it's best to buy a multifamily unit in a desirable geographical location and at a reasonable or low cost. I was fortunate to purchase my rentals during the most recent downturn.
I have found single family homes don't provide a good return on my investment. Instead I stick to duplex or larger unit homes. In fact more units the better since some costs are fixed regardless of how many units are in the building, such as lawn care and exterior maintenance.
The another big challenge to having a profitable rental business is tenant selection. I have learned this lesson the hard way—through trial and error. I thought my interviewing skills as a psychologist would have benefited me, but I think it may have hurt me. I tended to want to help others out by giving them a chance rather than seeing tenant selection as a business decision. Through the course of some painful experiences, I have learned the importance of not renting to friends or family, do a credit check on every candidate, and always go with the strongest candidate—not the neediest one.
Finally it is very worthwhile to join your local rental owners association. They provide excellent legal advice, aids for landlords, and on-going educational resources and classes.
Best of luck with this endeavor!