Want to buy my first rental property

[Michael Campbell]

Hi,

I'm a recent college graduate looking to invest in rental properties. I'm currently able to save about $400-600/month with a few thousand in the bank right now. I'd like to get started as soon as possible in purchasing rental properties. What would be my best approach to finding and financing a rental property?

I'm in the South Eastern PA region if that helps.

Thanks

[Account Closed]

That lease is sucking up a lot of money. Could you get a roommate to pay $300-400? I know that isn't ideal, but it will help save money. The best advice I can give to someone just starting out is to live like a college student as long as possible. Keep the old car, opt for the cheaper cell phone plan (and don't go over your minutes/data), don't eat out for every meal (good for both your wallet and your health), don't buy expensive clothes, etc. Remember, every dollar you spend on 'stuff' now could have been $20+ in future retirement years if you invested it wisely.

Some people take this to an extreme. Warren Buffet still drove an old VW Beetle even after he was a multimillionaire. He knew that spending $20,000 in current dollars meant giving up millions of future dollars. While I think there needs to be some balance between enjoying your life along the way and planning for the future, just remember what you're giving up each time you opt to splurge on something now.

As for rentals, I agree with Matt, Ben, and the other posts. If you can get out of your lease (or once the lease is up), look into buying a duplex with an FHA loan and live in one side while renting the other. That way you have one guaranteed great tenant (you!), and hopefully one more good one to help you build some equity.