With a smart investment, you can make money with rental properties. Although some of the revenue generated by rental properties may be required for mortgage payments, with a good rental property investment, you can practically count on a steady flow of income.
Talk to professionals and other rental property owners, real estate attorneys, real estate agents, accountants, and other landlords to learn what you can about the rental business.
Research the real estate market to determine prices for different types of rental properties in your area. Identify selling prices and rental prices. Analyze trends and future projections.
Decide where you will buy. Choose a location where rentals are in demand and property values are within your reach.
Choose the type of rental property in which you wish to invest. Do you want to rent an entire apartment building or a single-family residence?
Find properties that match your criteria. Look for properties that are good investments — those in good condition with little need of attention. Alternatively, seek out a low-cost, rundown property that can be made livable without significant expenditures — a structurally sound house requiring only cosmetic repairs, for example.
Buy the rental property.
Conduct whatever repairs are necessary to prepare the property to be rented.
Find tenants to rent your property. Advertise your property's availability for rent, take applications and run credit reports on prospective tenants. Lease the property only to applicants whose credit reports show they are trustworthy.
Manage the apartment yourself or hire a property manager (or property management firm). Ongoing requirements include rent collection, payment of taxes and insurance, and maintenance.