The bigger question is whether you want to become a landlord. There is a huge learning curve involved to do it right, and beginners too often quickly say…I can just rent it out. Are you handy with tenant-caused maintenance problems? Ready to get up to speed on all tenant-landlord laws? Can you list the red flags that should warn you away from certain applicants? Have you fully accounted for vacancy and fixup periods between tenants? Know how to interpret credit reports? Above all, have you considered ALL the costs involved over time, including the value of your own time?
Historically, owning a rental property is only worthwhile in those rare periods of rapid appreciation. From an operating standpoint you are up against the big rental or condo complexes that have economies of scale in purchasing, contracting, advertising, showing and on-site management. And prospective tenants are understandably suspicious of amateur landlords, which may lower your achievable rent.
