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Investing in a rental property is often a highly effective way to expand your revenue whether taking it on as a full time career or as a side hustle. But, success is never guaranteed. The key is finding a system that works for you financially.

There are a great amount of considerations to take into account before deciding to invest in a rental property. For example, overhead costs, repairs, interior design, and how much you can expect to buy the property for versus how much you may get upon selling (or your return on investment [ROI]).

First, calculating your ROI should be the main priority. This is as simple as dividing the net profit by the cost of the investment, then multiplying by 100, as seen through this calculator here. Once you have the expected return in front of you, determine what is reasonable for your financial situation and how much you need to earn to make it worthwhile.

As mentioned before, there are a number of factors to take into consideration when calculating your own net profit. Take the rental income for example. How much do you plan to charge your tenants each month? Exactly how much of the property do you own, and do you expect a change in property value? Will you have additional equity beyond the amount you put down on our mortgage? Taking the current housing market into consideration for all of this is also a must.

The expenses that come with owning a rental property can pile up quickly as well. This includes, but is not limited to, interest, any homeowner association fees, insurance, taxes, and regular expenses including maintenance and upkeep. So, while this can all be extremely overwhelming, it is something no investor should shy away from if they are truly passionate about buying a rental property.

Rental properties are a great way to generate income. Don’t let the many facets of this business venture deter you from moving forward. Like all business opportunities, there will be challenges, successes, and failures. Make sure to always measure your projected ROI, potential net profit, and, of course, your personal time. Few businesses are worth sacrificing your well-being for.