How to Buy Rental Property

It took me six months to find my first rent house, but I worked out a really good deal and I’d like to share with you my steps for finding a good rental property.Pick your tenants firstI started with picking the type of tenant I wanted to have. This is all for where I’m at close to Dallas and Fort Worth. I wanted a larger family that couldn’t fit into a 3 bed 2 bath single family residence (SFR). I wanted a family that had a car and a job that they commuted for. I also planned on kids and pets. I wanted tenants that wanted a good neighborhood with some social standing and with benefits, like a HOA controlled swimming pool.I pick the tenants first, because I can then scan through stuff faster and easier.Pick the intangible thingsNumber one for me was a good school district. I luckily live in a good one and made sure that my rental property was located in the right school district and I also made sure to be in the right county. I live close to the county line and Tarrant county has higher taxes than Denton county. I wanted a home in an HOA. They can be a problem, but they can also be a good thing. I wanted a property that would continually have a good draw for tenants.Most of these intangible things are decided on in picking the general location, type of tenant you want, education level, social standing, standard of living, income level, commuter or not, and family size. Now let me be sure and re iterate that you can NOT discriminate against people, but what you can do is select a product with a much narrower range of customers that are most likely to want it.It’s a numbers gameCost and return on investment are a big deal, so you normally have to look through lots of properties. I think I looked through around 75 – 100. That doesn’t mean I went and saw all these in person, just that they fit my initial criteria. I cut properties out if they don’t fit my criteria. Being more selective lets me cut through the clutter faster and not try to make a deal work. I need to find a deal that works on its own.Investing in a rental property really comes down to a numbers thing. If the numbers do not work out, then the deal does not work out. It’s as simple as that. You need to do your best to try and not let your emotions get in the way. I made that mistake on my second deal and I am still working on fixing it.Maintenance is a big dealOne very important thing to finding a property is also putting in place a maintenance strategy that will cut costs. Most people buy their first property close to their home so they can keep an eye on it. It’s much easier to drive 5 minutes to fix a problem than it is to drive an hour for the same thing. Finding contractors, DIY people, or any other combination of people that will help you take care of your property is something that needs to be figured out while your looking at properties.So just keep this in mind if your going to buy a property that is not accessible for what you want to do.Where to lookNow that I’ve gone over picking what type of rental property you want, let’s talk about where to find that property. I used a real estate agent that was also a real estate investor. The reason is that he was able to give me extra insight about rental conditions, cost of fixing, and the strength of the rental market. Some people argue against this, but I found it to be extremely helpful and he would not be trying to help me buy a house if he didn’t want the commission.Driving around and getting to know the local area is also a really important.I also used several websites. Here are the main websites that I used for my searches. There are more out there, but this is just a few. Just Google them and you’ll find
HUD HomestoreBe sure to look at the same property on different websites as they will have different information on the same property.Also, the county tax office will provide you with important tax information. You can’t forget your taxes!Use an Investment CalculatorI also recommend using an investment calculator like the one I use.

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