When you get started in the real estate investment business it’s often hard to decide which area you want to be involved with, so you start talking to other investors in the area to get their opinions. When it comes to Fort Wayne rental investments you will get a pretty good split of good and bad reviews from other investors because everyone has a different type of experience with them.
Read below a list of the pros and cons to help you get a sense of what Fort Wayne rental investments could look like for you.
By owning a Fort Wayne rental property you’ll have a monthly cash flow coming in and the freedom to do with is as you please. You can use it to pay for property maintenance or pay down monthly debt or something completely different, but know that the cash flow you bring in will be more than you could yield by putting your money in a savings account. If you’re taking care of the Fort Wayne rental property and finding the right tenants you’ll have a positive cash flow for the future.
Since you own the property and will be responsible for it you will be in charge of managing it. This means all maintenance issues, collecting and handling rent, and finding the right tenants will all be up to you. One way to handle everything is to hire a property manager but this also means paying an employee, which could cut into your cash flow and budget.
Since Fort Wayne rental investments are usually approached as more of a long-term investment you’ll be immune to market fluctuations and changes, which is great news for you. For example if you were to own a rehab property you would have to wait for the market fluctuation that will provide you with the best return. If you have a rental you will be able to wait until you own the property free and clear before deciding when you want to sell. This will allow you to focus elsewhere in your business without worrying too much about the money. Plus you’ll have the potential for appreciation and help you save for your future.
On the other hand, you need to keep in mind that nothing in this business is guaranteed. Tenants can decide to stop paying at any time, leaving you without their income. One month of missing rent has the potential to impact your business for several months. You’ll also have quite a bit of your cash tied up in this investment. If you were to decide to get out of owning a rental you would be at the mercy of the market, which can be difficult, because there is no guarantee the property value will go up in the near future.
Hire a professional, qualified accountant before you invest in a rental property to help you navigate the purchase process. There are a number of tax breaks available to you that should be brought to your attention from the start. Additionally, there are plenty of write-offs for expenses associated with upkeep of the property that will save you out of pocket money.
You should be aware that if you want to buy a Fort Wayne rental property you will pay more out of the gate because most one and two family properties will require a 20-25% down payment. This is in addition to higher closing cost and prepaid property tax requirements.
You can ask the opinions of 100 different investors about Fort Wayne rental investments, but only you can decide what is right for you and your real estate business. If you want a long-term investment that will help you build your portfolio and save for your future then this may be the option for you. Only you will know what first into your strategy.