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The question remains, is it worth it to own a home or property, where inflation is nearly equal to the appreciation rate? What about the added costs of property tax, homeowners insurance, and then maintenance? It depends upon the level of your research, work ethic, network, experience, dedication, and overall striving, is it at full throttle or you want to make easy money. You can make easy money but you have to do the behind the scenes work and build up a network and knowledge.
The goal of course is to have a steady cash flow from quality tenants. What about those tax deductions on your mortgage? They don’t add up to that much, really. The key is operating an investment property, a business, that pays on a monthly basis if you run the property with integrity and you’ve done you research from the beginning.
Back Up Plan
Create a back up plan. Could you live in the property if you were having trouble making money on renting the home? Do you know a friend of family member who is willing to bail you out if there’s an emergency? If you choose your property correctly, one that pays for itself, you should be in a good situation, but it doesn’t hurt to have a contingency plan in case of an emergency.
Negative Cash Flow
Many investors don’t want to own property if there’s negative cash flow. But look at your individual financial situation, maybe you can manage to deal with a negative cash flow, you see the property has the potential to gain in appreciation and the tax benefits are there, it might be wise to take advantage of this opportunity.
Learn more: How to Calculate Your ROI
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