Posted by Rich-CA on April 21, 2007 at 13:04:26:
You need to draw up a budget so you account for all your costs (down payment, closing, vacancy, repairs, HOA fees, utilities while vacant, insurance and so on). You also need a realistic idea of what similar occupied units are renting for and how long it takes to fill the vacancy (some markets its 2 weeks, others it takes 3 months). If you will self manage, then there are no management fees to budget.
Once you have realistic numbers, you can make a business decision as to what to do.
One more thing. Don’t gamble on the house price going up much more than the inflation rate. Some markets (like one where I have invested) have dropped over 17% in the last year. If I said “don’t count on appreciation to make money” on this forum a year ago I would get laughed at, but now the truth that appreciation is “icing” comes out. If you cannot make money without appreciation, don’t gamble.