Getting your first Findlay single-family rental property can be a wonderful experience. Yet, there are certain risks involved with these investments as well. To ensure that your first investment property purchase in Findlay becomes as profitable as you hope it will be, there are numerous factors you need to understand before you buy. For example, you’ll need the answers to questions like whom do you want to rent to? What type of rental property will you focus on? How will you finance your purchase? In what follows, we’ll answer these inquiries and other vital things you’ll need to learn to make buying your first rental property a rewarding experience.
Define Your End Goal
One of the first steps you should take when searching for your first single-family rental home is to set clearly defined end goals. It is important to know exactly what qualities you are searching for in your investment property before you start your property search. For instance, you might be hunting for properties in a particular area with a specific number of bedrooms or minimum square footage. You can also focus on an individual renter demographic, such as college students or retirees. Having more specific information allows you to refine your search criteria and locate potential properties more quickly.
Prepare Your Finances
In addition to identifying what qualities you are searching for in a property, it is imperative to prepare financially before you buy an investment property. Industry experts recommend paying down personal debt and saving for a down payment before beginning your property search. Reduced personal debt can help you to qualify for more favorable loan rates, while nearly all mortgage loans for an investment property will require a 20% down payment. Preparing to finance in advance is another important step, but be mindful of high-interest loans or mortgage products that seem too good to be true. By prequalifying with a trustworthy mortgage lender, you will be ready to seize the investment opportunities as they arrive. By prioritizing financial readiness, you’ll be in a better position to buy a rental property when the time comes.
Crunch the Numbers
After taking these necessary preliminary steps, the search for the ideal property can begin. One suggestion to remember during your search is that you should run a series of numbers on each prospective property, such as your margins, operating expenses, and expected return. This is where a lot of new investors make wrong decisions.
New investors need to remember to include all the expenses related to purchasing and preparing the rental property for lease, as well as ongoing property management, maintenance, and vacancy costs. Industry experts advise a margin of 10% and a 6% return in your first year means you have a profitable investment.
Stay Objective
It is worth noting that an investment property is just that, an investment. Getting attached to a particular property or allowing emotions to influence your judgments is not a good idea. Furthermore, the property you buy is not necessarily one you would ever live in yourself. Industry experts suggest choosing low-cost properties in high-demand areas for your first investment. But avoid fixer-uppers unless you are a highly skilled home remodeling expert or know a reliable contractor that can carry out the task for less than the going rate. Your first single-family rental property should be regarded as the first step toward a long and profitable investment career rather than the end goal. In this fashion, you can keep yourself on track and your investment properties in the black.
Design a Management Strategy
Finally, remember that acquiring a rental property is just the first step. You need a proactive management strategy to guarantee that your investment is profitable. Here is where the assistance of a Findlay property management company can be of great use. As local market experts, property managers can help you discover off-market investment properties, analyze market conditions, set rental rates, and other things. The right property management company is an invaluable partner in profitable rental property investing, as more seasoned investors will attest.
If you have spotted the ideal investment property, be sure to choose the right Findlay property management team. Contact Real Property Management Clarity Team at 567-200-2320 now.
Originally Published on March 13, 2020
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