Are you interested in investing in a rental property for the first time? Rental properties are one of the best ways to make money in real estate. However, there's a lot to consider and prepare before acquiring your first rental property.
We're here to help you out with some expert tips to achieve success as an investor. Keep reading to learn how to invest in rental property as a beginner.
1. Assess Your Skills
The first step in becoming a landlord is to assess your skills.
While a professional plumber or electrician can handle major repairs, it helps to have a solid understanding of the basics. For instance, can you repair a faucet leak or a toilet clog? If a plumber isn't available, you can avoid leaving your tenants with a mess.
Here are some useful skills for landlords to have:
- Outlet repair
- Basic plumbing
- HVAC maintenance (changing filters, cleaning, etc.)
- Drywall patching
- Basic pest control
You should have a list of contacts for the tasks you're not suited to handle yourself. For instance, an electrician, a plumber, a pest control service, and so on.
2. Choose the Ideal Location
Understanding the real estate market is key to finding a property in an area that's on the rise or in a thriving location rather than one that's in a declining part of town.
Research and investigate the area. Look for amenities such as coffee shops, restaurants, parks, grocery stores, shopping, and so on. Learn about the school district scores, and pick locations in areas with low crime rates. You should also consider public transportation and the current job market.
3. Acquire a Twenty Percent Down Payment
An investment property requires a larger down payment than a residential one. You'll need a 20% down payment (or larger) even if you have a good credit score.
You have a few different financing options for the down payment on your rental property investment. You can secure a personal loan or a home equity line of credit.
4. Screen Your Tenants
An essential part of becoming a landlord is choosing and screening tenants. You want quality tenants that will pay rent on time and keep the property in good condition.
Rule out anyone that has a history of paying rent late, isn't able to afford the rent, or has caused damage to rental properties in the past.
Screening tenants is a vital step in managing your rental property. One of the benefits of working with a property management company is that it's easy to find the perfect tenants for your building.
Need More Advice on How to Invest in Rental Property as a Beginner?
There's a lot to consider and learn for first-time landlords. If you need help or want to learn more about how to invest in rental property as a beginner, Inheritance Realty Group is here for you.
Our Columbus area property management services make handling a rental property easy. We help you find optimal tenants, conduct inspections, obtain important insights about the market, and much more. Learn more and get your free rental price analysis today!