Rent prices tend to rise over time, providing an inflation-protected income into your retirement years. You also might be able to cash in big later if the unit's value increases. It doesn't always work out that way, though. Some landlords wind up with a trashed property after evicting a tenant or lose their savings in a natural disaster.
A few risks you could face as a landlord. Investment property mortgages tend to be a little more difficult and costly to secure than primary residence mortgages. It can also be harder to take cash out of investment properties – either with a cash-out refinance or a home equity line of credit. In other words, you might not have access to the money during an emergency.
Those aren't the only risks you could face when owning a rental.
Many people focus on the positives of owning investment property. An extra income and potential to build equity with their tenants' money seems too good to be true, and it just might be. If you're going to be successful, you should acknowledge the risks that come with the territory and plan accordingly.
This article is intended to provide general information and should not be considered health, legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.