Investing in Rental Properties: 10 Tips to Know Before You Start

Before you start investing in rental properties, there are a few things that you need to make sure you know before starting the process!   We have compiled some of the best tips to help you avoid making common mistakes when investing in rental properties!

Tip #1 - Do Your Research

There is a lot to keep in mind when it comes to investment properties. Make sure you know the type of property that will be desirable on rent, pricing expectations, and more.

Tip #2 - Start Small 

Sometimes it's hard to not want an instant return on your investment!  Before you do a head first dive into the deep end, start with something small.

Tip #3 - Consider Your Up Front Costs 

Your costs will be sufficiently less if you are investing in one property versus a multi-unit building.  Take all the costs into consideration.

Tip #4 - Talk to Professionals 

Find a mentor who you can talk to and walk through the process with! They will have all the ins and outs of the investment process.  These mentors often have a knowledge base that will help greatly in your process, so it is worth the time to find one! 

 Tip #5 - Have an Exit Strategy

You need to be prepared to walk away in case things don’t go as planned.  You need to have an idea of how long you want the investment for and then make your long term plans accordingly. 

Tip #6 -  Don’t Forget About Taxes

There are different types of tax deductions that can help offset the cost of your investment if you do it right.  Make sure you ask about this when it comes to your investment properties. 

Tip #7 - Know Who Will Help You

Investment properties can cause a lot of stress!  Try to be realistic and have a plan on who will help take care of maintenance, repairs, insurance, etc. before purchasing too many units at once.

Tip #8 - Research the Location

This is KEY.  You need to know how safe the area is, what amenities are nearby and other items that might be important to potential renters or buyers.

Tip #9 - Know Your Competition

If you can, research where other people have put their money to find a good location that is less saturated and may have better returns.

Tip #10 - Know The Area 

If you don’t know what you are getting into without really knowing what you are getting into,  it can cause problems down the line. If you know that there isn't much demand for a specific type of property (apartments)  then maybe consider another type of property.

Be patient when it comes to investment properties!  If you follow these tips and plan accordingly, then you will develop a plan to invest in rental properties with ease and without the mistakes that can cost you.

If you are thinking about getting into real estate investments, we would love to help! We have a team of knowledgeable experts who can help guide you through the process.

Give us a call today to get started ::: (417) 812-5055