“How to Buy My First Rental Property – The Answers”
If I had known years ago what I know now about how to buy my first rental property, I’d have found my life as a landlord a lot easier. Fortunately, I’ve had a lot of lessons on how to manage property investment since then.
A lot of these lessons were learned at a price, though. I’ve made mistakes, bought properties only to find no one wanted to rent them, and so on.
If you’re asking yourself “how to buy my first rental property”, that probably doesn’t make you feel too positive.
But luckily for you, I’m here to help. Given all I’ve learned about how to buy my first rental property, I’m now in a prime position to help you out with your first property purchase.
Today, I’ll share with you the things any property investor should know when considering “how to buy my first rental property”. This will help you get started the right way with your property rental business.
Tips for Those Asking “How to Buy My First Rental Property”
First off, let me just say that there are a lot of answers to the question “how to buy my first rental property”.
Investing in property for the purposes of becoming a landlord is no simple task. There are a lot of things to learn and consider if you want to do it right.
That being said, some of these considerations are in fact more important than others. These are the ones we’ll take up as we answer “how to buy my first rental property”.
So, if you’re ready to learn the answers to “how to buy my first rental property”, let’s begin! We’ll start with a tip on how to get income flowing in as soon as possible after the investment.
Look for Rent-ready Options
The thing about asking how to buy my first rental property is that it means you probably have little experience managing rental properties.
In fact, unless you’ve spent time as a property manager, you probably have zero first-hand experience in it!
That means you likely know little about what it takes to get a property up and ready to rent. As such, that’s not something you want to think about when asking how to buy my first rental property.
The answer is simple. Get yourself a property that’s ready-to-rent. That way, you can work on getting the vacancy filled and collecting rent right away.
Even better, you may want to think about turnkey properties when asking how to buy my first rental property. These are properties that come with a property manager, and in some cases, tenants.
Look for Area Amenities
This is important when answering people’s questions of “how to buy my first rental property”. You see, it can determine how high or low your vacancy rate will be once you start renting out.
The highest demand for rental properties is typically in areas where there are a lot of amenities. That includes such things as public transport, schools, and popular destinations (restaurants, shops, malls).
Personally, were I still asking how to buy my first rental property, I’d look for a place near a university, in particular. It’s one of the best investments because students will generally be on the lookout for places to rent near a university.
The best part of this is that if you keep the students (and their parents) happy, you’ll likely be looking at tenants who’ll stay for around 4 years. That’s a source of income any landlord will love to have.
Interview the Neighbors
This goes hand-in-hand with seeing the property in person (which shouldn’t even be mentioned!). Let me tell you why.
When figuring out how to buy my first rental property, I only thought about how good it looked on paper and whether or not there might be demand for rentals in that area.
While those were legitimate concerns in how to buy my first rental property, they weren’t the only ones I should have had… as I found out later on.
The property I ended up buying was in great condition and actually in a part of the town where rental demand was high.
Unfortunately, I missed out on the fact that the part of the street it fronted suffered regular flooding due to gutter and landscaping issues in the area. As a result, my renters never stayed long once they got a taste of rainy weather.
I could have discovered this had I talked to the neighbors of the property when figuring out how to buy my first rental property. So, don’t make the same mistake I did — talk to yours!
Hire a Property Inspector
Another thing I’ve learned is to not just take real estate agents’ or sellers’ assurances when figuring out how to buy my first rental property. Instead, it’s worth the cost of getting a professional to inspect a property you’re interested in.
That way, you can avoid investing in a place that’s more of a liability than an asset. You don’t want to buy something that will cost you even more to fix just so you can rent it out safely and lawfully!
This is something a lot of novice investors fail to do. They find the perfect property, get ready to buy it, and in their eagerness, just snap up the bait instead of seeing if they can get a better deal first… which they usually can.
Remember this when asking the question of “how to buy my first rental property” — most sellers are willing to negotiate. In fact, I’ve never met a seller who wasn’t, because it’s practically a given!
That being said, you asking “how to buy my first rental property” probably means you don’t have a lot of experience at this type of negotiation either. Fortunately for you, you can get your real estate agent to do it on your behalf.
Remember too that you can usually get a sense of how far to negotiate by checking the values of other properties in the area.
Don’t forget to do an analysis of whether or not their values are likely to go up or down in the next decade, by the way.
I myself have discovered that’s always a concern when evaluating property value, in the process of learning how to buy my first rental property. You see, it tells you what sort of profits you can see in the future from the property.
Consider the Economy
The economy typically goes in recession and expansion cycles. If you pay attention to them, you’ll have a better chance of a good deal while answer the question “how to buy my first rental property”.
I myself discovered the usefulness of this tip while learning how to buy my first rental property. I bought during a recession, so it was fairly anxiety-inducing (fewer renters, after all).
Yet, because it was a recession, I also got a great deal. Later on, after learning this in how to buy my first rental property, I applied it again and again so that I got great deals on all my property investments.
The trick to surviving these cycles, I’ve discovered, is to look for properties that are in fairly risk-balanced areas. That means you need to look for places where rental demand remains (even if it decreases a little) during recessions.
The value of such properties can’t be exaggerated. They let you weather economic downturns and keep your vacancy rates low even when rental properties in other areas are mostly tenant-less.
In fact, it may even be my most important tip here, as it’s certainly served me best when I learned how to buy my first rental property. If your first property can provide you with steady and dependable passive income, you won’t have to worry about it too much afterwards.
Final Thoughts on Buying Your First Rental Property
That’s pretty much it for the most important tips I learned while figuring out how to buy my first rental property. Implement these tips in your own property search and acquisition and you should be safe from financial disasters.
Here they are again, as a review:
- Look for rent-ready properties when buying.
- Look for properties in areas where there are a lot of amenities.
- Interview the neighbors so you can get more info about the property and area.
- Hire a property inspector to give the property a once-over.
- Always negotiate, because you can usually get a better deal that way.
- Consider the economy when buying your property.
If you have any questions left or are still wondering “how to buy my first rental property”, feel free to leave me a note below. I’m also interested in advice from other investors on “how to buy my first rental property”.
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