Tips for Beginner With First Property

[Matt Speer]

Situation:
Purchased a home in Indianapolis for $24K that has a tenant who's been there since 2007. It's a family that's paying $600 in rent and paying utilities, as well. A partner and I paid all cash and plan to get it refinanced once we get the tenant locked down on a lease. 

Any Advice? 
I want to make sure we don't make any major mistakes on our first rental property. Does anyone have any general suggestions? We've thought about the idea of offering them seller financing (rent to own) situation since they don't have the credit to look elsewhere. Do we ask them to pay more rent? I think we could get $700 elsewhere, but they're good tenants (or at least it seems that way). Do we make any improvements/repairs or don't bother since they're in the house and happy? 

Thanks for your help! Hopefully this is one property of many to come! 

[Shawn Holsapple]

Welcome @Matt Speer!

I would HIGHLY recommend hiring a good property manger immediately!  Feel free to PM for a few to interview.

I'm always had a PM, even when I just had one property.  IMHO - you do NOT want to deal with tenants - ever.

I assume the tenant already has your contact info and knows your an owner?  If not, don't give them your info and tell them, if they ask, that you are "just" and agent for the landlord - this will help you keep your distance and sanity.

I'm a firm believer in letting professionals do their work and pay them accordingly.  Let the PM help you decide if the rent it too low and let them put a quality lease in place.

I've found rent to own properties in this price range don't typically work out since the tenant/buyer has too low of a credit score [I shoot for a 550 minimum] and/or doesn't have the additional down-payment needed.

I'd suggest just having the PM bump up the rent as much as they can, get a signed lease and let it run as-is for as long as possible.

I hope that helps.

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If you haven’t already, please read/listen to these books ASAP!

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Rich Dads Increase your financial IQ

The Real Book of Real Estate

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