First rental under contract, what might I miss?

Question

My first rental is now under contract. We are planning to close in a month. I am reading all the books and trying to make sure I am covering all my bases. What do newbies overlook at this point?  What might I not be thinking about! Thanks!

Ryan Billingsley · Answer

@Christa P.  Most important thing is the #s.  Does the property need any work to make it rent ready, if so how much will this cost?  What is the condition of all the main systems and expensive items such as roof, windows, heating/cooling, electric, plumbing, etc.  Will they need to be replaced in the next couple years?

When analyzing the cash flow you should account for vacancy, maintenance, property management (even if you do not use this you should still account for it to pay yourself or for future management), insurance, taxes, and mortgage (principal and interest).

Have you done your homework on the area, ARV of property and rent amount?

You will most likely have to pay for an occupancy inspection with your local municipality before it will be rent ready, have you called them to see what it cost and what they look for? Some municipalities require a landlord license as well.

Do you have a plan for marketing the property to find potential tenants once it is ready to rent out?  Do you have a tenant vetting system?

These are a couple items you need to be prepared for when buying a rental.