Sweet dreams are great but they don’t put cash in the bank.
Don’t just sit on the fence and dream of being a hot-shot rental property investment expert. Let’s get in the game!
Rental property investing presents a very stable and tried-and-true financial opportunity with immediate and long-term growth potential.
It’s one of the best asset classes you can add to your portfolio for short-term and retirement income.
And with the help of a top property management company in Baltimore, Maryland, rental property investing can be a hands-off growth and income producing investment.
But I’m preaching to the choir, right?
You know all of these things, which is why you’re here. You just need to get off the bench and onto the field!
To do that, there are some things that you’ll need to do.
#1 – Do Your Homework
Spend some time reading and researching all you can about real estate investing. You’ll know that you’ve really getting it when you start seeing the commonalities and differences in approaches different veteran investors take.
There’s a ton of free information exists online about real estate investing. When purchasing a book, look for those that offer practical guides on buying, flipping, renting, and selling properties.
Steer totally clear of the gurus, websites, programs and books that claim you can make massive amounts of income in 30 to 60 days as well as books that are decades old that outline techniques that may no longer work. You can listen to audio books in the car and while getting a good pump at the gym.
#2 – Follow the Pros
As with most disciplines, you should look to learn from the best. It’s especially useful to learn from their mistakes so you don’t have to make them yourself. To achieve success, you need to model your investing decisions after what other successful real estate investors have done.
The harder you work and the more effort you put into your real estate investment business, the greater your ultimate reward will become over time.
#3 – Recruit a Great Realtor
You need to add a solid Realtor to your team to help you locate properties. Not all Realtors are experienced or even adept at helping investors. Understanding rental properties and this business takes a commitment to learning, and the best agent will understand many different facets of investing.
Before you hire a Realtor, ask about cash flow, appreciation, equity capture, and debt pay down. Make sure whoever you use to help you buy your investment properties is focused on this part of the market. You don’t want someone who does investment real estate part time as a hobby.
Since we’re in the business of helping rental property investors, you should definitely give Utz Real Estate a call to start your search.
#4 – Connect with Fellow Rental Property Owners
Build relationships with other investors about local real estate. Join a real estate club in your area (do a quick Google search to find them). Real estate clubs are great places to network with other investors, lenders, and repair service providers.
You can often pick up helpful advice about your local market from other club members. Some communities offer courses on real estate investing through adult education or local real estate brokerages.
#5 – Credit and Financing
Check your credit report to determine your ability to finance rental property investments.
Most lenders require minimum scores of 650 from borrowers who want to buy investment property. Also, calculate to determine if your total debt-to-monthly-income ratio is low.
It may make sense to pay down outstanding credit card debt or car loans in order to improve your debt ratios. You’re entitled to one free credit report per year from the three major credit bureaus, but they’ll only provide your history, and not your score.
#6 – Pinpoint Your First Property Area
Determine the best areas to look for properties. New investors often make the mistake of limiting their search to areas close to their home. However, you may find better deals further away.
You don’t need to live close to your investment property. Tenants aren’t going to call you when they need maintenance help or have emergencies.
As a serious investor, you’ll hire a property management company that is local, can manage your properties and their tenants well, and can respond to issues that arise immediately.
#7 – Hunt for Rental Property Investments
Consider multiple sources for buying properties. The local Multiple Listing Service (MLS) is not your only option, and you don’t have to bang on doors in run-down neighborhoods, looking for distressed sellers.
Sometimes, you can find better deals on real estate auction sites, such as Auction.com. These sites make it possible for buyers to easily make purchases in locations outside of their immediate area.
At this point there’s nothing to it but to do it.
Perhaps, an even better place to start is to schedule a free strategy session with the property management and investment experts at Utz Property Management.