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5 Steps to Getting Started as a Real Estate Investor

 

If you’re interested in investing in an asset that will bring you significant returns, becoming a real estate investor could be your next step. Because rental payments are often referred to as “passive income,” it’s easy to get the idea that investing in real estate is a simple process. But if you want to find a good property and land the right tenants, you need a smart strategy. The experts at the Flynn Team hope the following guidelines will help you purchase your first investment property. 

 

Getting Your Business Started

 

Once you’ve decided to start your own rental property business, you’ll need to decide what type of business entity you plan to pursue. Most rental property businesses choose to establish an LLC for the legal protection it offers them. You’ll need to fill out paperwork and address any copyrights or trademarks you may require. All that paperwork can get overwhelming, so hire a company that can file all that paperwork for you.

 

Work With the Right Agent

 

If you purchased a home for your primary residence, you probably worked with a real estate agent. As an investor, connecting with a qualified agent is a savvy move, but you need to take the extra time to work with an agent who has specific experience with investment properties. An “investor friendly” agent like the experts at the Flynn Team can provide insight on which neighborhoods you should consider, and they might even let you in on some deals that aren’t on the market. 

 

Smart Budgeting

 

According to Lendova, you should expect to spend about 20 percent of your property’s listing price on the down payment, but you may secure a better interest rate if you put down 25 percent. 

 

Remember, your goal is to work within the limitations of your personal budget to find a property that will provide long-term returns on your investment. This can mean renovating a property that has some maintenance problems. Your property may not look aesthetically pleasing when you buy it, but you can transform it into a very desirable rental. 

 

Make Necessary Repairs

 

You probably have lots of ideas for renovations and new fixtures for your property. If you want to increase your property’s value, start the renovation process by installing wood flooring. Wood flooring is durable and hardy, and it brings a certain warmth to your property’s interior, which can make a great impression on tenants. Plus, it’s easier to clean and maintain wood floors than carpet, so as the landlord, this option will likely be cheaper for you in the long run!

 

Market Your Property

 

Your methods for marketing your property will vary on the location and the kind of tenants you would like to rent to. For example, if you purchased a condo in a downtown area that will attract young professionals, utilize popular rental sites. If you invested in an apartment in a college town, you might also want to hang up some flyers around the local campus. This is also the time to draw up a lease that will protect both you and your future tenants. 

 

Choosing Tenants

 

If you set an appropriate monthly rental price in line with comparable properties in your neighborhood, you’ll start hearing from prospective tenants soon. Don’t just select tenants based on a friendly interaction at an open house or private viewing; instead, you should thoroughly screen everyone who applies. You should ask for whatever employment, credit, and income information is allowed by law. It is a good idea to consult with a seasoned real estate attorney and check in with them periodically to see if legal requirements have changed. 

 

As a first-time real estate investor, you might feel overwhelmed by the process of buying your new rental property, and you’ll have to spend a significant amount of money before you start receiving rental payments. But once your very first tenants are settled in, you’ll be grateful for this valuable asset and the revenue it generates. 



Katie Conroy is a writer at advicemine.com, the opinions and or advice contained in this article are hers and not those of the Flynn Team, or any of its agents or employees.