Planning on investing in your first rental property? If so, you’re not alone!
Buying a rental property for the first time can be a very overwhelming experience because there’s so much to do! The good news though is that you can make this process easy and also set the stage for buying your next rental by following these simple tips.
Know the local market
“If you’re buying to rent the property, look at local demand and match that to the property type. Is it students, couples, families or professionals that you will be supplying? All have different needs and expectations. Make sure your property matches those needs.”
—Neil Willis, Managing Director of Rycal Group
Manage your money
“Save money when the going is good, meaning when you have tenants. There will be moments when you do not have a tenant and you’ll also need money for repairs. Finally, for brand new property investors planning to own a portfolio of rentals, I’d say, create a separate account for the rental income right away.”
—Ogechi Igbokwe, Real Estate Investor and Founder, OneSavvyDollar
Hire a tenant rep
“You have probably done your research and learned a fair share about the market in your area, but when it comes to buying or leasing your first property, you shouldn’t go at it alone. Instead, find a tenant rep to guide you through the process. A tenant rep is a licensed commercial real estate professional who can help with tenant-landlord negotiations.“
—Windsor Aughtry, Commercial Real Estate Developer and Brokerage Firm
Focus your strategy
“Pick an area, pick a property type, pick a strategy and get started. Don’t say you’ll invest all over a state or even an entire county because you will rarely have the insight necessary to do so wisely and with confidence.
Understand that inventory types can change drastically including the repair bills that make them profitable. For example, being in too many different types of properties could have you overspending on rehabs.
Also, get very focused on the buying strategies you can actually execute based on your budget, time, and experience constraints. As an example, if you have a 9-5 job and you start mailer campaigns, think of all the leads you’ll miss because you can’t answer the phone. Worse yet, think of all the money you’ll waste.
—Aaron Norris, MBA, APR, CSPG Real Estate Lender, The Norris Group
“The first step to begin real estate investing is education and networking. Famous books that inspire countless investors are Rich Dad, Poor Dad and Real Estate Riches. These books lay out ‘big picture’ reasons and strategies for investing in real estate. After understanding general principles, deep diving into the details is the next step. Texts like The Book on Managing Rental Properties and The Book on Flipping Houses provide concrete guidance.”
—Lucas Machado, Real Estate Investor, House Heroes
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