How much income can a rental property offer you? and by that I mean netincome = rent - mortgage.
The way things are currently, unless you pay cash for the home, you are doing VERY good to have a positive cash flow of 100-200 bucks.... and that better be put back for when you have maintenance issues at the home.
I think the good side of rental properties is to build some long term wealth, not so much to 'make wealth'. In other words, the key is to let someone else pay for the house.... so that in 30 years, you have a 'free' house... not so that you can stay at home and pay your own bills and go to the movies off your rental income.
Lets say you buy a 100K home; 20% down will be required plus closing costs.. so you need around 23K+. You get a 30 year loan for 80K... That loan only is going to be just under 500. Then you have to figure taxes and insurance, which varies from state to state. You can probably assume 100-200 per month on those. That makes your total out of pocket $700. Usually rentals will 'rent' for 1%, but I dont think they are doing that well in many markets. At least where I am at, a 100K house is probably going to rent for 900ish a month.. and it needs to be a decent newer home with decent upgrades to get that...
That leaves you $200 a month 'profit'. Of course, you better make sure you have access to some money as when the A/C unit quits, hot water, etc etc.. you need to get it fixed ASAP. Also, remember there will be some months where its not rented so you still have to pay that $700 bill out fo pocket....
Also, as a medical student, I think getting a home loan, let alone a rental loan, is going to be super difficult (unless you have some deep pocket family folks behind you). When I bought a home as a resident 5 years ago, it was a piece of cake.. I took little to the table in the way of down payments and was a bit nervous about the amount I was borrowing. Four years later, things have changed in the mortgage market. I took 20% to the table, was married, and combined had a well into six figure income (resident, moonlighting, and her income) with a contract starting as a full time EM physician..needless to say, it took multiple hops, and much more time to get the loan approved... and I felt MUCH more comfortable with the home we were buying and felt like we could have easily afforded a home that costs twice as much. Its a sign of the changing mortgage ways..
) but I still invest with a small amount of my savings. I only invest in a few stocks that I consider to be sure things, instead of dabbling in penny stocks like I did in college. It won't make me rich but it's a fun pastime, and hopefully I can begin to build a good portfolio over the course of med school.
