Is it a good time to invest in a Rental Property?

[Elaine Chua]

HI All, wondering if anyone could give me some advice on investing in a  rental property? We are interested to get a townhome as a rental investment but everyone I meet is telling me it is now the seller's market and the figures are not great for investment. I would be interested to know your opinion on this. I am aware it is difficult to time the market but I want to avoid buying at the peak as then it would make the rental investment less attractive.  

[Ali Boone]

It's easier if you don't rely on what anyone tells you to judge whether or not it's the time to buy, it's better to just shop for properties and make that call for yourself.

The key is to know what you're looking for. What do you want from a rental property? Do you want cash flow? If so, does the property cash flow? How is the market and neighborhood as far as being able to sustain the numbers on it? If you don't know the answer to that, you want to find out.

Most of the mystery gets taken out of the equation when you know better what you are doing (you, as in everyone). If you see a property you think you want to buy as an investment, be able to tell anyone who asks why you believe it's a good investment. If you don't know why it is, that means you don't know enough yet. Figure out the answer to that and you'll have just learned a lot about rental properties (and be miles ahead of most).

The only mystery left after you figure all that stuff out is what the market and the values are going to do at any particular time. But if you buy a good enough property, you should be able to endure a drop in value.