Ready To Purchase Your First Investment Property? 3 Steps You Should Take Before You Purchase Your First Property

Posted on: 6 February 2018

You've waited a long time to get involved in investment real estate. You want to make sure you do everything right. The last thing you want is to lose money on your initial investment. That's where doing your homework becomes essential. Before you invest in your first rental property, here are three steps you should take.

Take the Time to Educate Yourself

When it comes to purchasing your first investment property, the most important thing you can remember is that you need to get educated about the process. Hiring a real estate agent, speaking to a real estate attorney, and asking your friends for advice are all important aspects of the process, but at the end of the day, you still need to do your own research. That means you need know how to invest your money before you actually enter the market. Take the time to educate yourself by taking classes, joining seminars, and doing the leg-work you'll need in order to be as informed as possible. After all, it's your hard-earned money that's going to be invested in your rental properties.

Decide on Single-Family or Multi-Family

Now that you've decided to take the plunge and enter the world of investment property, you've got one major decision to make, and that's whether you'll go single-family or multi-family housing. Single-family means that you'll be purchasing one home that will house one individual family. However, a multi-family complex will involve multiple apartments, duplexs, or townhomes. Both involve investing in rental property. However, one will give you responsibility over a single-family home, while the other will give you responsibility over multiple units. You'll need to decide how quickly you want to jump into the investment real estate game.

Get a Feel for the Rental Market

Investing in rental property is all about timing. Get in when the timing is wrong and you could end up with property that simply won't rent, or that you'll need to take a hit on the rental price. That's why it's important that you get the feel for the rental market before you make your purchase. Spend some time researching the classified ads and speaking to rental agencies. See what the going rates are for rental property in your area. It's also a good idea to look at the level of incentives that landlords are offering prospective tenants. If landlords are going heavy on the incentives, such as discounts on deposits, or offers for free-months rent at signing, it may be a sign that the rental market is down. If that's the case, you may want to wait a few months before you enter the market.

Reach out to the professionals at a place like Keller Williams Realty-Debbie and Mark Sample for more information.