Rental Properties...Friend or Foe?

I’ve talked to several Teammates across the Country this year who are wanting to buy rental properties.  Getting into real estate may sound glamorous but the reality is when you are paying a loan with higher interest rates, rising property taxes, hefty insurance premiums, upkeep/repairs, management fees (potentially), etc., it may take a very long time to see positive returns.  Add to that, if/when you sell that property for a profit, you will have to pay capital gains taxes further reducing your net return!  In full transparency, I have owned several rental properties over the years (both good and bad!).  They can provide diversity against other investments and have the potential to make you money over time.  However, they can also become a money pit and work against your long-term wealth building plans.  If you are determined to get into real estate, please do so with a business plan, a good accountant/financial professional who has great knowledge on the subject, have a pile of cash built up for unexpected repairs/expenses and rising insurance costs and DO YOUR HOMEWORK before you buy. 

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