Are you considering the opportunity of rental property investment for the very first time and not sure what the next step is or how even how to get started?
At times investing in your first rental property might feel rather daunting. I am here to guide you through this process by offering you some valuable tips/options available that you can use to embark on your journey to financial freedom. I am sharing with you a brief list of lessons I have learned along the way and my hope is that it will propel you towards your goals for success through the purchase of your first rental property.
A reassuring fact is that it is common knowledge in the real estate market that buying rental property can be the most secure and fastest ways to build serious wealth. However, the how to knowledge is not so common.
Here are several tips for beginner real estate/rental property investors to get you going:
1) You Need to DO Research/Homework Before Proceeding:
Study the niche you want to invest in and learn everything you can about that subject. This means researching the following areas thoroughly:
a) What kind of investment property you want to buy?
b) What kind of neighborhood you want to invest in?
c) What the average rent is in your area?
d) What kind of return on investment you hope to make?
2) It is a Great Idea to Start Small:
One can get overly impressed by the big deals that the internet gurus talk about but even they had to start somewhere. My suggestion is to start with a single house or smaller multiple-dwelling unit, maybe even considering going into it with a partner, to see if the business really suits you. An option is to invest in single-family residences as they are the easiest properties to purchase. For the most part, condos require a larger down payment and monthly association fees. When you begin with a single-family home it will give you the opportunity to get a feel for the maintenance, bookkeeping and any other work that might be required.
3) Understand That as a Landlord Means You Are A Business Owner
Being in real estate is a business and it is different than being a private homeowner. Be organized – build systems to manage your life, and seek to improve your efficiency. Many landlords get burned out and hate the role is because they treat it as either a hobby or a job – it is neither. You are a business owner and treat it as such. Acting as a landlord for instance, means you will have to make certain crucial choices such as the property you are purchasing has to make sense from a business perspective, it is not a house you’d like to live in. Furthermore, it should be a reasonably priced home likely to appeal to the kind of tenants you’re looking for.
Some additional knowledge that might also assist you in moving you towards your goal is to consider the following: invest somewhere you know and figure out the right rent to charge for the area your first rental property is located at. Visit your local real estate investing association ( REIA ). Look for some rental classes to attend and network with other landlords in your area. Offer to buy them a coffee and ask for some advice.