Buying a property is a great way to invest in a piece of real estate that will gain in value and to make some money off the passive cash flow from rent. But to help you out as a first-time investor or someone who is just getting started in the property rental, there are some basic rules you can follow to help your success. Here are some tips to consider when you are shopping for your first rental house purchase.
Buy a Single-Family Home
When you look at all the types of rental properties you can invest in, you should start with something small to get you started. You may not want to buy a four-plex at the beginning, as this will give you four units and four tenants, along with all the management issues multiplied by four.
Instead, look for a single-family home that is in good condition and provides a number of bedrooms and at least two bathrooms along with a fenced-in yard and potentially a garage. These features can make the property more attractive to a renter and help you maximize your rent potential on the property. And if you find a single-family home for sale that already has a tenant in place, this will give you cash flow almost immediately. Just be sure you review any current rental contract in place and make sure the rental income is enough to cover your property costs.
Consider Property Management
Once you get your rental property purchased and advertise it for rent to look for a tenant, you might consider adding on a property manager to help you out with the management. Your property manager will fully screen all new tenants and handle any late rent collections and even an eviction process, if it is necessary.
A property manager can handle all the property's management tasks from finding a new tenant to fulfilling maintenance calls and repairs. So when, for example, your single-family home's water heater goes out on the weekend, your tenants can contact your property manager to let them know. Your property manager will arrange for a new water heater to be installed for them as soon as possible so they don't have to go without hot water for more than one day.
As another example, if your tenant has a water leak in the basement, your property manager will call a plumber to repair the leak and also arrange to clean up and dry out the moisture damage so mold does not grow. It is important to provide a habitable environment for your tenants, which can be accomplished with the help of your property management team.
For information about single-family homes for sale in your area, contact a real estate agent.