Did you know that regular individuals own 41% of all rental properties in this country? It's true, so it's not crazy if you're considering purchasing some rental properties.
But, how do you buy your first investment property? After all, you have to start somewhere. Buying your first one might make you realize you don't want more. However, then again, you might really like owning rentals.
As you consider buying your first one, you should look for the best tips before going through with it. Here is a guide to help you learn the top six tips for buying your first property.
1. Stay Local
As you learn how to choose your first investment property, staying local is the first thing to consider. Purchasing a property nearby makes managing it more convenient.
Therefore, depending on your location, you might want to stick with a 10 to 30-mile radius. A local property will be close enough for you to keep a close eye on the property and care for it.
2. Consider Financing
Next, buying your first investment property requires cash or a loan. Do you have enough cash to pay for it outright, or will you need to finance it?
If you need a loan to buy it, you might want to consider your options. For example, you could take a home equity loan if you have enough equity in your residence. However, there are also other options for financing a rental.
3. Start Small
Additionally, learning how to invest in property requires starting small. Starting small helps you get the hang of rental property management without taking a considerable risk.
Starting small might mean purchasing a small house as your first property instead of a huge building with multiple units.
4. Calculate Cash Flow
Another great tip is to calculate the expected cash flow of a property before buying it. Cash flow refers to the cash coming in and going out.
A good rental property has more cash coming in than going out.
5. Find a Low-Maintenance Property
As you choose a property to purchase, you might want to limit your search to a low-maintenance property. A low-maintenance property requires less work and money, making your job easier.
6. Consider Hiring a Property Manager
One of the benefits of investing in property is that you can hire a property manager to manage it for you. In fact, you should consider hiring one, as property managers help you collect rent, choose tenants, and much more.
Follow These Tips to Buy Your First Investment Property
After reading these tips, you might feel energized and ready to start shopping for your first investment property. These tips can help you make a wise decision about the property you purchase.
As you prepare for this, you might want to find the best property management firm in the Houston area. You can contact Precision Realty and Management, LLC in Houston for help.
We offer all types of property management services and can help you start your business the right way. Call us or visit our site to learn more.