Buying a second home for investment is a big financial decision that can be intimidating without the proper knowledge. To better prepare you to take the plunge in purchasing a rental property, I have put together some key factors to consider.
According to an article from Rocket Mortgage, for an investment property to be considered a success or a good financial investment, the monthly income should be equal to or more than 1% of the home's sales price.
For example, can you pay to furnish it, and does it need any repairs? You should also have some financial reserves in case the home isn't rented continuously and when it needs to be unoccupied for repairs after long-term tenants vacate.
To put this in other words, you need to figure out what kind of rental property you want: long-term or short-term rentals. Long-term rental involves more of a landlord position while short-term would be more like an Airbnb.