Depending upon Landlord’s preference of the location, there are 2 options available when it comes to choosing rental property.
A modern condo rental property. A major urban centre like Chicago or Toronto has a healthy condo rental market. It has a tendency to appreciate at a very healthy rate over the years.
The most modern condo rentals require almost no time from the landlord for the maintenance. Its done by the property management company, the cost of which is covered by the monthly condo fees. As against less hassle, there is less income. Because of the rise of the real estate market in major cities, there is very little to no cash flow possibility in this kind of investment. However, Landlord gains in terms of equity build up and real estate appreciation.
Buy multi-units or student rentals for cash flow. This option is available in smaller towns surrounding the major urban centres like Greater Toronto Area.
The multi-unit and student rentals are a different ball game. Typically, this kind of property is available for a cheaper price compared to other properties in the area. The biggest advantage of these rentals is the cash flow. Most full-time landlords are into these kinds of investment properties. For a new player, this option looks like a difficult proposition. However, one chooses to invest patience and hard work, this option presents with the great opportunity to retire early, mainly because of cash-flow.
The following factors affect your choice or preference:
- Landlords Availability
- Willingness to get directly involved in tenancy issues
- Experience in landlording
- Proximity to rental property
- Lifestyle choices or family priorities
- The local Municipal legislation, if any
1. As mentioned earlier, the biggest factor is the availability of the landlord time-wise. If you are happy doing your full-time job, your choice should be to buy a condo and rent it out. Most cities in North America have very healthy to hot condo rental market. So real estate investment becomes your side-gig.
2. It’s your own choice whether you want to get involved in regular communications with your tenants. With most states and province having proper laws and enforcement conditions, it’s not difficult to do the landlording by yourself. However, it requires your willingness.
3. Experience would count, depending upon what is the character of your investment property. If it is multi-unit which needs repairs, you would require experience to make smart decisions. If its condo rental, you’ll be good even if you are a novice. I’ll say this. All experienced landlords were the novice at the start. You have to start gaining experience at some point. So you better start now.
4. It’s common sense proposition to be closer to your rental property if you are handling it by yourself. In most North American cities and towns, You would get services of property management companies.
5. It’s a lifestyle choice. You are going to take up challenges that come with getting into the rental business and deal with realtors, tenants, handymen and repairs and so on…
6. Before you get into this business, it’s prudent to check out local and state laws about landlords and tenants issues. Resources are available all online. You can check for landlords associations too if any.