Rental income from property
Potentially one of the most lucrative investments for generating
income, property can also be risky because, unlike financial products
such as bonds, it also generates expenses, and requires maintenance.An investor buys a house and becomes a landlord in
an industrial town with a high population of seasonal
workers. Demand for short-term rentals is strong.An investor buys a house and becomes a landlord in
a booming city. House prices are high, but people are
only renting in the short term before they buy.High rental yield
Low rental yield
$1,200 expenses
In the first year, the investor-landlord has to repair
the heating system, on top of meeting insurance costs
and mortgage interest payments.The investor-landlord has to pay for repainting.
Their interest payments are high because the deposit
amount was minimal and the loan amount is large.Rental income Landlord expenses
SOLD
$200,000SOLD
$500,000$
$
$2,000 expenses
$14,400
RENT
$17,000
RENT
US_170-171_Rental_income_from_property.indd 170 13/10/2016 16:20