Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

What to bear in mind when considering a rental home as an investment?
First off, I would label this as speculation, not investing.  There are many variables that you don't seem to be considering, and putting down such a small amount opens you to a wide variety of risks.  Not having an "emergency fund" for the rental increases that risk greatly.  (I assume that you would not have an emergency fund based upon "The basic idea is to save up a 20% down payment on a property and take out a mortgage".) This type of speculation lent a hand in the housing bubble. Is your home paid off?  If not you can reduce your personal risk (by owning your home), and have a pretty safe investment in real estate.  Mission accomplished. My hope for you would be that you are also putting money in the market.  Historically it has performed quite well while always having its share of "chicken littles".