While many of us know that rental real estate is the best way to build wealth, we may not be comfortable taking action. Below is a simple step by step guide to How to Buy your first Investment property or your 100th.
Step 1: Research - This is the most critical step. You need to figure out the following before you go shopping :
- What kind of investment property do you want to buy (Single Family, Duplex, Apartment Buildings?)
- How much you can afford to pay?
- What kind of neighborhood you want to invest in?
- What kind of return on investment you hope to make?
Step 2: Make a Plan
Now it is time to make a plan and set your criteria for your desired property. Try to remove emotion from the equation, don't get distracted by the home with the beautiful garden. Remember you are investing not buying your dream home. You should also write down your plan so you can refer back to it.
Step 3: Arrange Financing
Unless you are an all cash buyer, you will need to arrange financing. Before shopping for a rental property, be sure to figure out how much you can afford to buy. There are numerous different paths to real estate financing so be sure to weigh all your financing options before making your choices. You can try to work with local banks or arrange private financing.
Step 4: Begin Shopping For a Rental Property
Now comes the Fun part! Shopping for your first rental property! There are a lot of great ways that you can get find rental property. Traditional MLS listed properties are a good place to begin. But more seasoned investors often find It helpful to find an agent who specializes in working with investors. Another place is working directly with homeowners or property vendors such as www.StlDiscountProperty.com. If you work with a third party make sure to share your property criteria from Steps 1 and 2 above.
Step 5: Make Your Offer
When you find a rental property you want to pursue, and have walked through it, your next step is to make your offer. This is a step many new investors get stuck on. Taking action beats inaction all day long. Make an offer that is in line with your criteria but don't be afraid to offer a price you want.
Step 6: Due Diligence
The offer was accepted and you are now under contract. Now, is the time to continue your “due diligence.” During this period you can inspect the property to make sure it is as described. If you are working with a seller directly you may want to hire a professional 3rd party inspector to Inspect the property for you.
Step 7 : Start Land-lording
Closing day has come and gone and you are now the owner of a Rental Property! The fun part of this journey has just begun. See our next blog post on managing your portfolio.
Discount Property Investor is focused on providing bargain priced investment property to Real Estate Investors. As well as top notch advice on managing rental property and rehab or fix and flip projects. If you're looking to buy rental property deals below market value. Or income property for sale at a discount check out our current selection in the properties tab. Buy property the Discount Property Investor way!