When looking into buying a rental property there is something crucial that most people overlook.
Do you have enough money to cover the initial investment, a major repair, vacancy and a tenant damaging your home beyond the deposit?
Those are all unlikely to come due at the same time, but it’s possible. If that situation would bankrupt your or cause your rental to get foreclosed, it’s a bad investment regardless of the numbers. You need to be able to look at the entire picture and plan for the worst case scenario. What would you do in that situation?