agents, property managers, attorneys, and accountants. Cultivate relationships with these experts and leverage their expertise to make informed decisions. In addition to gathering a network of supportive people as you move through the process of buying a rental property, find the best contractors and maintenance folks to help you rehab and maintain your investment. 6. UNDERSTAND LOCAL LAWS AND REGULATIONS Planning on buying a single-family home and turning it into a multi- family property with apartments on each floor? Before you make an offer, familiarize yourself with local laws and regulations governing rental properties. This includes not only tenant rights and landlord obligations but also building codes and zoning regulations. The last thing you want is to be stuck with a property that cannot be changed or even rented out due to strict codes or zoning laws. This knowledge helps you avoid legal issues and ensures compliance. 7. SECURE FINANCING Many experienced investors have financing in place before they even start looking for their next property. Explore various financing options, including traditional mortgages, hard money loans, and private lenders. Evaluate the terms and conditions of each option and choose the one that best fits your investment strategy and financial situation.
itself but there’s more to it than that. Also consider: ● Advertising for tenants.
8. CONDUCT A PROPERTY INSPECTION A property inspection of a prospective rental property is even more critical than a regular home inspection. Properties need to be safe and sound for tenants: Landlords can face legal action if a tenant has an issue. Before purchasing a rental prop- erty, conduct a thorough inspection to identify any structural, electrical, or plumbing issues. Hire a profes- sional inspector to uncover potential problems and factor the cost of necessary repairs into your budget. 9. NEGOTIATE, NEGOTIATE, NEGOTIATE Rental property investment is filled with opportunities to develop strong negotiation skills. The best negotiators strike deals so that everyone walks away feeling like the transaction was a success. A few factors that can influence a seller’s willingness to negotiate include: ● The seller’s motivation. ● Market conditions. ● Inventory. ● The property’s condition. Unless a seller utters the words, “Best and final,” everything is up for negotiation. 10. BE PREPARED FOR PROPERTY MANAGEMENT Successful rental property invest- ing requires ongoing management and maintenance. Management includes upkeep of the property
● Scheduling tours. ● Screening tenants. ● Collecting payments.
● Handling the accounting (including taxes when you sell a property). Not prepared to be a landlord? It’s not for everyone. Consider hiring a property management company if you lack the time or expertise to manage the property yourself. A property management company is also critical if you do not live in the area where you have invested. THE LAST THING TO CONSIDER Investing in rental property is a great way to build generational wealth. If you approach it as a long game (instead of a quick fix), you’re more likely to be successful as you gradually build your portfolio with a wide variety of properties. Whether you are looking to buy your first rental property or your 50th, take the time to consider your goals. Then, plan out your strategy to acquire and manage a rental property investment. These will be the best things you can do. •
Luke Babich is the co-founder of Clever Real Estate, a real estate education plat- form committed to helping homebuyers, sellers, and investors make smarter finan-
cial decisions. Babich is a licensed real estate agent in the state of Missouri. His research and insights have been featured on BiggerPockets, Inman, the Los Angeles Times, and other online and media outlets. Babich earned a bachelor’s degree in political science, with honors, from Stanford University.
thinkrealty . com | 41
Made with FlippingBook Online newsletter