Can the purchase of a rental property compete in terms of returns with other investments?
We are looking at a property that is relatively new, in great shape, and has a rental history of about 8% of the asking price. With all scheduled expenses it appears that everything would be covered at this rental level. However, this rental level includes the "shoulder" months, or at least a lot of them.
The question we are struggling with is the amount of the unscheduled or non-routine expenses, such as replacing furniture, electronics, painting the inside/outside, etc. I would imagine these would eat into your revenue considerably.
Is it realistic to want a property such as this to be a pure investment? We live 7 hours away and would only be going there a couple of times per year so the "happiness" part of it would not be as great. Most people I have spoken with who own rental properties say it is not the investment they were hoping for but have resigned themselves to the concept that it is a lifestyle.
We aren't really looking for a lifestyle. Should we stay away from this type of an investment property? The price on the house is ok but not a steal and it is unpredictable what type of appreciation will occur in the next 5-10 years.
Any input from your experience would be appreciated.