Buying real estate to rent is an option that has higher risk than some other investments. However, the returns can be good. Assume you have purchased a single-family home that you intend to rent. The house will rent for per month. You will have the following expenses:
- Monthly mortgage
- Monthly insurance
- Taxes every 6 months
- Repairs (yearly estimate)
- Monthly lawn care or snow removal
Calculate the total rent you will receive in a year. Assume the house is rented for the full 12 months per year.
In this exercise, we are to determine the total rent received for the year assuming that the house is rented for the full 12 months per year.