The difference between commercial properties and residential properties is that someone will be living in the residential home. That will mean that you are the landlord and as such need to keep the property in a good and livable condition. As maintenance issues come up you will need to address them promptly.

Maintaining an additional property can sometimes seem like a hassle or big financial responsibility. Take a moment to think about the benefits of keeping a rental home in good repair. If your home is run down in disrepair no one will want to live there. That means no rental income to cover that mortgage payment. Another reason for keeping the maintenance on the home up to date is that when you go to sell the property a well maintained home will return a better profit from appreciation.

With a rental home you need to be prepared for the commitment and be dedicated to your responsibilities as owner and landlord. It will take an investment of your time and in some cases personal capital to have a property that generates revenue. In the best case scenario the rental income will return a profit, but should minimally cover the homes maintenance.

When it comes to rental properties there are a couple types of income. Those are appreciation and yield. They appreciation you realize when you sell the home for more than you paid for it. The yield is your annual rental income. These concepts usually work inversely. That means that a property that has higher yield will generally have a smaller appreciation and vice-versa. The best situation would be a balanced approach to achieving moderation with each.

Financing a residential purchase has differences from a commercial real estate loan. With a residential property you are not usually expecting a profit on the scale of a commercial real estate deal. The residential mortgage terms are typically longer term which will allow you more payment, term and interest options. Many investors that already own a home will secure a home equity loan that helps them with the down payment on the investment property.