Thinking of buying a rental property? There are few investment that provide a better rate of return and security than rental property. Of course, you’ll have to have enough cash up front, typically 25% plus whatever closing costs and initial upgrades or maintenance you’ll need to perform before renting the property, but if you can swing that (it may even make sense to pull money from another property in the form of HELOC for part of that down payment), you’ll enjoy a steady monthly income and long term appreciation of the asset over time.

There are some downsides you should be aware of. If something breaks in your rental property, you’ll need to have the cash or credit to fix it ASAP. If one of your tenants fails to pay rent or trashes the place, recovering that money or evicting the tenant can be difficult. Having owned rental properties myself, though, I can tell you it’s worth the minor headaches.

When looking for a property, it’s best to look at it as objectively as possible. This is not the time to fall in love with a certain aspect of the home. You’re not going to live there. Sure, something about it might be of added benefit in attracting renters, but at the end of the day, a fairly quick market analysis will be able to tell you what it’s going to rent for. Then all you need to do is run the numbers and see if it pencils. Generally, if you’re at least going to break even every month with rents covering your mortgage and expenses, it’s worth it since you’re building equity both by having your renters pay down the mortgage principle and, over time, the property value is likely to increase so you can sell it for a profit when the time comes.

Here’s a simple rental investment calculator I put together to help you make the decision.