When you are a landlord, you can make money in three different ways. One is by collecting a rent higher than your mortgage payment and other expenses.. Typically this isn't much, but it is still a profit. Secondly you make money by accumulating equity in the property with every monthly payment you make, after all the mortgage isn't going to last forever.. Thirdly you make money by the realized increased value in the property over time such that a $300k house increasing in value at a modest 2% per year will be worth more than $65,000 more in only 10 years.
Yes you can but there is much less buffer room. If your mortgage, insurance, tax, and upkeep are less than what a comparable house will rent for then you will make that much profit. You want to try to at least break even or come close to minimize risk. Of course its good to have a little bit of money saved up and an additional income source in case something happens and you don't get rent for a few months. Not investing is better than a poor investment, especially if its questionable from the get go. Also factor in that some people are real animals and might trash the place while they are there costing you extra $$ when they move out.
You can pay a larger down payment to reduce the payment. What most do is lose money at first and gradually raise the rent. I for example bought a home in 1985 for 51.5K with a 40K mortgage so payment was 422 a month. If I had rented it out for about 425 I would lose money after vacancies and repairs and things. After a year or two I might raise the rent to 450 then 475 and then 500 so I was breaking even. Now the house is worth about 200K and rent would be about 1,500 but the payment would be about 600 because taxes went up but in a year no more mortgage so only taxes and insurance and repairs to pay and I could sell it for 200K so make about 150K profit and have many years of positive cash flow. I would have had loses after depreciation the first few years so have a tax break.
It depends on a lot of things.for example if you have a home that cost 150,000 then most likely you have about an 1100 dollar mortgage payment and you can always rent it for about 1600.but renting can be very risky.more times than not people trash your house.make sure they have good credit and check all references.but even if you are paying 1800 dollars and can only rent it for 1600 you are still making money ever in a bad economy and market.you are building equity and can make it all back when you sell it.
PLUS, there are tax write-offs and advantages when you are in the business of renting a house.
It works better if you bought the house for a low price.
How can you if you're still paying mortgage? Won't you just be making enough to pay the mortagage? Beginner.
