EASY TIPS FOR A SMART
RENTAL HOME INVESTMENT
With any investment, several factors drive decision-making, but when it comes to buying real estate, taking a
holistic approach is critical. Consider current market conditions, cash flow, and the benefits of ownership to form an
educated decision. Here are a few tips to make the most of this purchase:
• Buy when interest rates are low. With lower principal payments, buying power increases. In the long run, a rental
property is a tangible asset with values that are usually less volatile than equity markets.
• Increase your down payment. Provide enough of a down payment so that the carrying costs (principal loan
payment, taxes, insurance, HOA assessments, and management fees), coupled with expected rent, yield a
positive cash flow.
• Have money saved up. Set aside enough funds for the occasional minor or standard repairs. A typical property
should expect annual repair costs to be at or below half of one percent of the property's value.
• Talk to the experts. Consult a CPA or other qualified tax advisor to better understand tax benefits now and in the
term of your investment.
• Have a reason and a plan. Determine the type, location, and size of property you'd like to buy and be realistic
about how much time, money, and energy you can commit because unexpected challenges can and do occur.
