As a first time investor, purchasing a rental property as an addition to your portfolio, may seem complicated or perhaps even a little scary at first glance. However, there is no reason to feel overwhelmed. Today’s real estate market is strong and buying rental property is a strategic and fairly safe way to invest your money. 

By following a few of these tips for 1st time property investors, as outlined here in this article, you will be pleasantly surprised to find out how manageable this undertaking can be. 

Cash flow is always a good thing. When looking at a property to potentially purchase in order to turn around and lease out, make sure that the monthly rent payment coming in will be greater than what the property is costing you.

It would be beneficial for you to speak with others already familiar with the local market to research what kind of rents the area can currently demand. Individuals to inquire with are property managers, real estate agents, brokers, or others in the community who also own investment properties in the vicinity. You could also do your own research online. Visit websites such as Zillow.com or Apartments.com and search the local area for rental properties similar to the one you are considering acquiring. The rent prices listed on these websites will give you a good generalized understanding of what the current market will support.

Research local real estate markets trends and make sure you are purchasing a property in a high growth market. While it is never fool-proof, more often than not, analysis can predict which markets will see the largest increases in market values. The influx of more people into the area, along with the targeted demographic will certainly give you a better understanding of how your investment property value will be doing a few years down the road.

It’s much easier to get your footing when dealing with a single family dwelling. Condos, small houses, or possibly even a duplex are great starting points to learn the ropes and not be weighed down by the stress of the unknown. The costs associated with single family spaces are also significantly lower than owning and managing a multi-family building. 

Before you make any offer on an investment property, make sure you have researched your options. Decide first if you want to pay cash or if you will be financing. Talk with your bank about mortgage rates and also check with your tax advisor to make sure which financing option is most beneficial to your unique financial situation.

If you are just getting into the market, deciding whether you should hire a property manager or not is a big one that you should give great consideration to. You may feel confident in your abilities to self manage your property, but be ready to jump in right away! Every day that you do not have a tenant occupying the space, is money lost. Marketing the rental unit will be the first step as a new owner to begin the search for your new tenants.

If at any time during the process of marketing you begin to feel overwhelmed, you can always reach out to a reputable property management company in the area to take over from there.

How you use the property is another significant factor in the decision making process. You may already have an idea of this when you first thought about buying, but knowing the type of prospective tenant you will have, is going to impact the type of property you are purchasing. Will you be renting our unit to people on vacation and in town for a week at a time? Or are you looking for a long term tenant who will stay for a year at a time. This will also be a large deciding factor in if you may need to engage the help of a property management company. 

Many renters are drawn to the local area by the amenities and attractions which are available to them. Popular neighborhoods often hover around restaurants and shopping centers that are within walking distance or a short drive by car. If you are purchasing a rental in an area that attracts many tourists each year, being close to the attractions of the town will be a selling point. Most people on vacation want to be in the vicinity of the things they will want to be doing while they are enjoying their stay. 

There are a lot of factors to consider, however if evaluated one by one, none of them are overwhelming enough to keep you from pursuing your goal of investing in a rental property.

Let Thousand Hills Realty have the opportunity to tell you about how we can make your first time investing in a Branson apartment rental property a little easier. 

Call us today at (417) 337-8081...we’d love to earn your business!