Rental Property Investing for Beginners

RENTAL PROPERTY INVESTING FOR BEGINNERS

TIPS FOR BUYING YOUR FIRST RENTAL PROPERTY AND CREATE PASSIVE INCOME AND WEALTH THROUGH SMART BUY AND HOLD REAL ESTATE INVESTING

Table of Contents

Introduction

Chapter 1: Which Properties Make the Best Rentals?

Multi-Family Homes

Single-Family Homes

Apartment

Chapter 2: Where Do You Look for Rental Properties?

Networking

Find the property online

Finding the property with a realtor

Find the property on print media

Take some time to visit auctions

Chapter 3: Pros and Cons of Rental Properties in Expensive and Inexpensive Areas

Pros of Rental Properties in Expensive Areas

Better Security

Increased Rental Income

Good Quality of Tenants to Deal With

Appealing Neighborhood

Cons of Rental Properties in Expensive Areas

Heavy Capital

Too Much to Consider

Pros of Rental Properties in Inexpensive Areas

Affordable Investment

Ideal for Novice Investors

High Demand for Housing

Cons of Rental Properties in Inexpensive Areas

Flooded Investors

Tenant Issues

Limited Amenities

Chapter 4: How to Analyze the Rental Property Before Purchasing

Where is it Located?

What is the Market Price?

What is the Reason that the Seller is Offering It?

Take a Look at the Property

Will it Meet Your Requirements?

How Much Work Needs To Be Done?

How Much Rent Will You Be Able to Charge on It?

Chapter 5: Searching for rental property

Build a team of experts

Real estate agent

Appraiser

Investment property financing expert

Chapter 6: Deciding on an Ideal Location for Your Rental Property

Consider the Demand

Employment Opportunities

Population Growth

Convenience

Safety

Transportation

Local Laws

Property Taxes

Rental Laws

Municipal Services

Rent Controls

Low Supply

Chapter 7: Scoping out the Right Property for you

Conduct your research

Pay attention to the condition of the house

Quality of home construction

A solid infrastructure

Conducive floor plan

Spacious rooms

The character of the home and natural light usage

Chapter 8: The Due Diligence Process

Do a home inspection

Research the property’s title

Review zoning laws

Do a land survey

An environmental assessment

Getting an appraisal on the property

Chapter 9: The buying process

Buy and hold onto the property

Flip your property

Wholesale real estate

Commercial real estate

Define your home selection criteria

Determine how you will be financing the property

Begin searching for properties to purchase

Quickly run each property through your list of criteria

Get pre-approved at the bank of your choice

Make an offer on the property you want to purchase

Negotiate and close the deal

Submit paperwork and prepare for closing

Sign title papers

Will you hire a property manager or manage the property yourself?

Establish proper processes like building reusable rental form templates

Research local property managers and ask them for an estimate to make sure the numbers work

Chapter 10: Offer and Negotiations

Designing a Convincing Offer

Rental Property Negotiation Secrets

Research, Research, Research

Seek Alternatives

Don’t Mention Your Best Price

Know the Seller’s Negotiation Tactics

Be Honest

Some Friction Won’t Harm

Negotiating in a Market Filled with Several Homes

Negotiating in a Market with Many Buyers

Chapter 11: Financing Your Rental Properties............................................4

Seller Financing....................................................................................................4

House Hack............................................................................................................4

Selling Some of Your Properties.........................................................................4

Bank Loans

Fix-and-Flip Loans

Chapter 12: How to Make an Offer on a Property and the Negotiation Process................5

How Much Should I Offer?..................................................................................5

Some Negotiation Strategies to Use..................................................................5

Chapter 13: Getting Ready to Close................................................................5

Members Involved in Closing..............................................................................5

What Happens During Closing?..........................................................................5

Setting the Closing Date......................................................................................5

Chapter 14: Creating a foolproof strategy for investing

Buy properties that are 10-20% under market value

Buy a property in a B Class neighborhood where there are about 35% renters

Set the rent price as 1% of the purchase price of the home minimum

A mission statement..............................................................................................6

Your goals...............................................................................................................6

Desired time frame...............................................................................................6

Markets you are interested in.............................................................................6

Strategize...............................................................................................................6

Set criteria.............................................................................................................6

Create a marketing plan......................................................................................6

Financing................................................................................................................6

Acquisition..............................................................................................................6

Systems...................................................................................................................6

Exit strategy and a backup plan.........................................................................6

Snapshot of current financials............................................................................6

Is purchasing a rental home right for you?.......................................................6

Chapter 15: Owning a Rental Property...........................................................6

Organization is key to lasting success...............................................................6

Use technology to your benefit...........................................................................6

Implement plans to deal with complaints, maintenance requests, and move-outs...............6

Renting out your property...................................................................................6

A step by step process to renting out your property.......................................6

Writing a lease.......................................................................................................6

Automatic lease renewal..................................................................................6

Late fees.............................................................................................................6

Pet fees...............................................................................................................6

Utilities................................................................................................................6

Smoking..............................................................................................................6

Maintenance.......................................................................................................6

Lease termination..............................................................................................6

Cleaning..............................................................................................................6

Landscaping.......................................................................................................6

Fines....................................................................................................................6

Keys and remotes..............................................................................................6

Damages.............................................................................................................6

Renter’s insurance

Items to replace or upgrade frequently

Toilet

Locks

Lights

Outlets

Fire extinguishers and smoke alarms............................................................7

Legal landlord responsibilities............................................................................7

Chapter 16: Potential Rental Property PitFalls...........................................7

More damage by tenants than normal wear and tear.....................................7

General repair costs.............................................................................................7

Property sits empty for more than a month without tenants.........................7

Legal expenses if tenants take you to court......................................................7

The market crashes or you bought a house in a declining city......................7

Chapter 17: Rehab Costs Valuation.................................................................7

Having your basic systems in place...................................................................7

Durability is going to count.................................................................................7

Buy it right.............................................................................................................7

How to Price It All Out.........................................................................................7

Things to Fix Up on Your Rental Property........................................................7

Painting...............................................................................................................7

Look at the flooring...........................................................................................7

Check the appliances........................................................................................7

Focus on the landscaping a bit........................................................................7

Fix anything that is broken..............................................................................7

Chapter 18: Managing Your Finances

Bank accounts

Bookkeeping and administration

Start an emergency fund.....................................................................................8

Know, understand, and predict your cash flow................................................8

Pay down your debt..............................................................................................8

Track your net worth............................................................................................8

Outline your goals and priorities........................................................................8

Chapter 19: Managing Your Rentals...............................................................8

Renting Out Your Property..................................................................................8

Preparing Your Rentals........................................................................................8

Determining Your Rental Price...........................................................................8

Marketing Your Rentals.......................................................................................8

Converting Interests into Visits..........................................................................8

Selecting Your Tenants........................................................................................8

Managing Tenant Movement...............................................................................8

Collecting Rent......................................................................................................8

Dealing with Troublesome Tenants....................................................................8

Maintaining the Rental Properties.....................................................................8

Protecting Your Rental Properties......................................................................8

Chapter 20: Ways to Cut Losses and Let Profits Ride

Chapter 21: Tips for Success in Rental Property Investing.....................9

Start making money when you buy....................................................................9

Focus on consistent residency............................................................................9

Know how involved you want to be from the start...........................................9

Don’t expect too much too soon..........................................................................9

Don’t overestimate your abilities........................................................................9

Don’t underestimate relationships.....................................................................9

Chapter 22: How to Handle Failure in Rental Property Investing.........9

Conclusion.............................................................................................................10

Introduction

Real estate investing is actually much simpler than you realize! It certainly helps to have the right team on your side, especially when you’re not exactly sure what you’re doing. Basically, having the right team means the difference between failing and succeeding. You’ll learn exactly why rentals make the best investments, which property types are best for renting out, and why location matters so much. Your success relies on having tenants so you need to consider what those tenants are looking for and how to provide it to them. Different properties do well in different types of locations; a multi-family home might not do as well in the city as it would in the suburbs.

Rental property investing is a good way to diversify your income. To most investors, this is a great way of boosting their wealth. If you have already decided to invest in rental properties, this is a good move that you have taken. Expect numerous benefits to come your way including the fact that you will be meeting your financial goals within a specified period of time. Making your decision to become a landlord is not an easy move. The fact that you have taken this bold step implies that you expect the best in the future.

To ensure that you invest in a promising rental property, you need to indulge yourself in an extensive analysis of the rental property you are about to invest in. This entails finding out whether you are settling for the best location. Consider factors such as the security of the neighborhood. Talk to landlords within the area to know if the place is secure enough.

It is always wise to bear in mind that being tactful in the real estate business gets you amazing deals without having to spend a lot.

If you have been thinking of investing big, then it is quite likely that the idea of rental property investing must have crossed your mind. Investing in rental properties is what most successful business people do. However, the process of investing your money in rental properties is not as straightforward as you might think. Equally, the process is also not complicated. With a few tips here and there, you will land yourself a property that will make you rich.

Rental property investing is a form of investment that has been there for ages now. The houses that most of us live in belong to people. They belong to investors who decided to invest in rental houses to earn something out of it. Deciding to invest in rental properties is not something that you can wake up one morning and decide to do. One of the main reasons as to why most individuals will rush into the idea of investing in rental properties is of course the financial freedom benefit that comes with it.

In simple terms investment property is an investment that is primarily purchased to generate income. This type of property is one that is bought for the purposes of either renting it out or reselling it for a profit after undertaking some renovations. There are, however, some variations of this term.

Chapter 1: Which Properties Make the Best Rentals?

We all know that mistakes happen: accidentally saying the wrong thing, bumping into someone, or dropping what you were just holding. But while these mistakes are pretty small and can be overlooked, choosing the wrong rental property can really mess up your new real estate company. It can mean a lot of unnecessary stress, be very expensive to fix, and even cause you yourself to feel ill. So how do you make sure to choose the best property?