To property owners - need advice

[Bayne05]

I've always had an interest in owning rental property, just don't have the right knowledge about it. There's a few things I'd like to know:

Is it a good investment?
Is it wise to get a bank loan to do it?
What are the challenges that usually come with it?
Should I start small property or go big? (like renting out a house or renting an apartment building)
Should I manage the property myself or hire agents to do it.

Your responses will be much appreciated.

 

[stovepipe]

It's a good investment if the price is right
Factor in the cost of repairs
Location is always a factor
Unless you cash, I'd get a mortgage, preferably 15 years
Starting small in anything new is always a smart thing
Managing it yourself would be best. Costs around 20% in my area to hire a PM company

 

[Bible_Belt]

Banks will charge you a higher rate for an investment property loan, and they will subtract 25% of your annual rental income to cover maintenance and vacancies in assessing your ability to repay.

The general rule is that the lower priced the rental unit, the greater a percentage of that amount it will return in rent. But cheaper units come with more maintenance and more troublesome tenants.

When a tenant is late on rent, sending them an eviction notice via certified mail will scare the crap out of them and is much more effective than going to see them in person. My state requires a 30 day notice to evict. Tenants usually think that notice is the actual eviction, due to the legalese wording of the letter.

 

[sazc]

I've always had an interest in owning rental property, just don't have the right knowledge about it. There's a few things I'd like to know:

Is it a good investment?
Is it wise to get a bank loan to do it?
What are the challenges that usually come with it?
Should I start small property or go big? (like renting out a house or renting an apartment building)
Should I manage the property myself or hire agents to do it.

Your responses will be much appreciated.

definitely a good investment. purchase when the housing market 'crashes' It does happen in cycles. purchase when bank interest rates are low.
do a 30 year loan so your payments are low and you can bank the extra cash for repairs and emergency's. Dont spend your additional income. Save it.
If you can swing an apartment building then I would do that.
If you work 40 hours a week, I would turn over maintenance to a property management company. Mine charges me 3% of my monthly rents.

The one big scary thing about purchasing rentals is you think "what if no one rents?!" If you scope out a property management company first, they usually know the market and have a realtor, or two, that will look for properties you can purchase that they know will rent.

it's been nothing but a great experience for me. I'm looking for more to purchase but the market is high right now so I am waiting and looking for good deals.