Ideally, the rental income that your investment properties produce each month should be more than enough to cover the cost of financing, and the cost of managing and maintaining them.
In the real world, that often isn’t going to happen.
It certainly won’t always happen if you invest in a market where capital growth is very rapid and the rental market hasn’t yet become established. The rental market will eventually be created because of the affordability barrier – but there will be a lag.
Certainly there are circumstances where you might feel it’s fine to subsidise a property for a period of time – this is likely to be the case when you want to take advantage of the extraordinary capital growth in central and east European markets, for example.
With thanks to BuyAssociation.
