In addition to the money, there are other complex aspects of buying real estate for the purpose of renting or selling. It's important that you have good management skills and an eye for detail, as there are numerous details involved with any property. You need to be able to maintain the property, which means proper upkeep. You have to factor that into your costs. Unless you are very handy, you will need to know how and where to find the right electricians, plumbers, and contractors. Maintaining a property is a major responsibility; unlike stocks or bonds, you are responsible for keeping this investment in good condition.

If you decide to make the leap and purchase a rental property, you will be entering the world of the landlord. If you have been a renter, you know a good landlord can make life easy, while a bad landlord can make life miserable. How you act as a landlord will have a great impact on the well-being of your investment.

Problems will arise in any rental situation, and the way you handle them is important to maintaining the property at a reasonable cost. It's far easier to make the effort to maintain a property when it's your own residence. However, you'll have to do as much work — if not more — to protect your investment. If the investment is taking up too much of your time, you are basically losing income. That's time you could be spending earning money somewhere else. If you are spending hours maintaining a property, you are cutting into your income-earning time and losing money in the process. People choose stocks, bonds, and mutual funds as investments partly because they require little work to maintain.

Good communication with your tenants is crucial to your ability to be a good landlord and to protect your valuable investment. Tenants need to understand your expectations, as well as your rules and regulations, in advance of entering into an agreement to lease your property. Any changes in the rules need to be expressed and explained in writing with sufficient notice to tenants. Make sure all communications with tenants are done in writing and that you can prove the communication was delivered to the tenant.

No matter what shape it's in, you cannot expect to buy a rental property, immediately find tenants, and then just walk away and let the monthly rental checks roll in. If you aren't prepared to manage your rental property, or if you just don't have the time, hire a professional property manager. Property managers take care of daily repair and upkeep issues, landscaping needs, tenant concerns and complaints, and collecting rent. Fees vary based on the level of work required and size of building involved. You can hire an individual to do this work or contract with a management company. If you think you're going to need a professional manager to handle your rental property, make sure you factor that cost into your decision to buy the property and the rental costs you pass on to your tenants.