If you’re a potential first time investor wondering how to buy rental property, we have some resources and things to think about. These are just some of the basics to get you started on how to buy a rental home.
Objectives in Buying Rental Property
One of the first things you have to decide when you’re buying an investment property is – what are your objectives? Think about what you’re looking for in a rental home and why. Decide if this is the best use of your money, or if it’s better to invest in other things. When buying investment property, most people want to either create cash flow or build equity for when you sell. Those are the two main goals for investing in rental property.
Real Estate Investing for Beginners: A Formula
I have a formula sheet I have used for years to help me decide whether I want to buy a property or not. It takes into consideration the purchase price, how much money I’ll put into it, what the rent will be, what the property management fee will be, and what the taxes and insurance will cost. You also have to think about general maintenance expenses. Consider current maintenance needs and deferred maintenance that might be needed in the future.
How to Start Investing in Property
Find someone who can help you. There are books about how to start investing in property, and you can use an investment company that specializes in working with first time buyers or investors. We know of one company based in Utah – Strongbrook, and they provide great mentorship on how to do
financing or how to buy with cash. They are a great resource. You can also use a local Realtor. Make sure you get one who specializes in working with investors.
You can acquire properties by going to a sheriff sale or a tax sale.
Look at what your objective is, do some research, and that will help you. There are lots of upsides to real estate investment, but a lot of big pitfalls too. If you need help determining what’s best for you, contact us at ES Property Management. Once you decide to buy a property, we’d love to provide the Indianapolis property management for you.
