Like any other investment, it's essential to do your research before buying a rental property. Ensure you know what to expect in terms of expenses, expected return on investment, and market conditions in the area.

2. Get pre-approved for a mortgage

One of the most important things you can do when buying a rental property is pre-approved for a mortgage. This will give you a good idea of how much you can afford to spend and show potential sellers that you're a serious buyer. With the BRRRR strategy, you should already have a lender in mind and probably hard money at that. Additionally, have a set exit strategy and know who will be refinancing the property.

3. Consider your long-term plans

When buying a rental property, it's essential to consider your long-term objectives for it. Will you be renting it out indefinitely, or do you plan on eventually selling it? If you plan on selling it down the road, you'll want to make sure the property is in a good location and has potential for appreciation. Make your money before you buy the property!

4. Choose the right property

When choosing a rental property, it's crucial to find one that will be appealing to tenants. Make sure it's in a good location, has adequate parking, and is in good condition.

5. Have a plan for repairs and maintenance

One of the things you need to consider when buying a rental property is how you'll handle repairs and maintenance. You'll likely need to set aside some money each month to cover these costs, so make sure you have a plan in place.

6. Screen your tenants carefully

When renting out your property, it's essential to screen your tenants carefully. Make sure you ask for references and do a credit check before renting to anyone. This will help ensure that you're getting quality tenants who will care for your property.

7. Set up an LLC

If you're buying a rental property intending to rent it out, it's a good idea to set up an LLC. This will help protect you from any legal issues that may arise with your tenants. Consult an asset protection specialist, CPA, or Attorney to be sure. However, you could also use an online service or file with the county clerk in your area.

8. Keep up with the paperwork

When renting out a property, it's essential to keep track of all the paperwork. Make sure you have a file for each tenant and keep track of all payments and repairs. Use an online source like STESSA or Apartments . com for help on tracking expenses and rental income.

When buying your first rental property, it's essential to research and plan. Getting pre-approved for a mortgage is one of the most important things you can do, and you'll also want to make sure the property you choose is in a good location and condition. Buying a rental property can be an excellent investment!

Philadelphia, Pennsylvania

2 Votes