How To Buy A First Rental Property

As with any real estate investment buying rental properties takes a lot of homework.

How to buy a first rental property. And the near perfect formula is even more streamlined with companies like roofstock who helps people just like john buy rental properties yup properties that are already rented out so you don t have to find tenants for investment purposes. In order to rent out a property you ll obviously have to purchase it first. If i d taken the time to learn the above tips when i first started investing in real estate it would have saved me hundreds of thousands of dollars and many a sleepless night. As i grew my portfolio i focused on buying properties in the 65k 85k per unit range. Rental properties don t necessarily come with the glamour and huge paychecks that flipping houses is known for but it is a proven method of building multiple streams of permanent income.

First of all we bought our properties near the bottom of the market which means they have already increased tremendously in value. But buying your first rental property is an even more. It may be a side business for you but you still must treat it like a business. First time rental property buyers should only buy a property that cash flows. Take a rental property that costs 100 000 to buy.

It s a symbol of financial stability and maturity. There will be unexpected expenses so leave a margin for error. The best way to limit your risk and increase your odds of success is to make sure you are putting enough money down to be cashflow positive. Ideally you ll want to have a 20 30 percent down payment saved before. Since buying my first investment property i have not touched 1 of the rental income it generates.

With rental income taxes depreciation and income tax the cash buyer could see 9 500. Seek a buy to let mortgage. This will be done with a buy to let mortgage which is assessed differently than an owner occupied mortgage. Although we were far from experts when we got started i strongly believe that buying rental properties is one of the best financial moves we have made. I focused on buying cheaper properties.

Buying your first home has long been considered a rite of passage into adulthood. Buying rental properties was an excellent choice for us. I saved it all combined it with my personal savings and used it to fund more property purchases. Buying owning and managing rental properties is a business. As you begin to explore the possibility of buying your first rental property it s important to keep in mind how much money to save for a down payment.