Buying rental property is a great investment right now. Thousands of foreclosures have flooded the market and are dragging prices down, and the end is not in sight. But where do you start? It doesn’t have to be overwhelming if you break it down:
- Get your financing in line first. How’s your credit? Trim down on that extra (unnecessary) spending and start planning for your first purchase! Figure out what you can spend and how you’ll pay for the property.
- Find your target neighborhood. Before I bought my first rental property I drove several neighborhoods, none of which were further than 30 minutes from my house. Drive through at all hours of the day, talk to homeowners . . . they will give you precious details about the area/residents.
- Talk to other, seasoned investors who’ve been there, done that. Join a landlord association. Read books. (Mine is a good one. Lol . . . but seriously, it offers tools, tips, techniques, forms, products and advice to simplify the process.) In other words, don’t go into this blind.
- Decide on multi- or single-family rental properties. Multi-family will bring in more money but is more labor intensive.
- Look at your personality, work life and home life — do you have the time, etc. to manage your own properties? Not everyone is equipped to do this work. Some people have time constraints that prevent them from doing it, others have personality constraints that make it difficult.
- If you’re not going to do much of the work yourself, find honest, reliable subs before you buy. You’ll want to hit the ground running as soon as you close on a property, so you’ll need to have your workers all lined up and ready to go.
There’s so much involved in buying rental properties, especially as a first time buyer. But it’s fantastic for income and long term investment, and now is an excellent time to consider jumping in . . .
So prepare well, trust yourself, and go for it!