Getting your first Chamblee single-family rental property can be a wonderful experience. However, there is a possibility of loss, just like any other investment. It is crucial to educate yourself thoroughly about the Chamblee real estate market before making your first investment property purchase there. Questions like, “Who do you want to rent to?” need to be answered. What type of rental property will you prioritize? How will you finance your purchase? In what follows, we’ll talk about these questions and other key things you’ll need to know to make buying your first rental property a great experience.
Define Your End Goal
It is vital to establish clearly defined end goals when purchasing your first single-family rental home. It is a good idea to give some thought to the features you want in an investment property before starting your property search. For illustration, you could be searching for properties within a particular location with a specific number of bedrooms or minimum square footage. You can also focus on a particular renter demographic, such as college students or retirees. Having more information allows you to refine your search parameters and locate potential properties faster.
Prepare Your Finances
Besides identifying what characteristics you are looking for in a property, it is also imperative to prepare financially before you purchase an investment property. Before starting a property search, it’s wise to settle personal debt and save for a down payment. Reducing personal debt can boost your chances of receiving more favorable loan rates, whereas most mortgage loans for an investment property will need a 20% down payment. Arranging to finance in advance is another critical step, but pay attention to high-interest loans or mortgage products that seem a little too good to be true. By prequalifying with a reliable mortgage lender, you will be ready to make the most of investment opportunities as they arrive. When the time comes, being financially stable will give you more confidence to buy a rental property.
Crunch the Numbers
After these vital first steps have been accomplished, the search for the right property can begin. Calculating your margins, operating expenses, and expected return should be a top priority during your search. Many new investors often make serious mistakes in this aspect.
New investors sometimes overlook the various expenses associated with buying and preparing the rental property for lease, as well as ongoing costs related to property management, upkeep, and vacancies. Experts in the industry recommend a margin goal of 10%, and a 6% return in your first year means you have a profitable investment.
Stay Objective
It is essential to remember that an investment property is just that, an investment. It is not advisable to let your feelings about a property or your attachment to it influence your actions. Also, it’s unlikely that you’ll ever use the home you buy as your primary residence. For your first investment, industry experts recommend choosing low-cost properties in high-demand areas. But avoid fixer-uppers unless you either have extensive experience with house renovations or have access to a reliable contractor willing to execute the work for less than the current rate. Your first single-family rental property should be viewed as the beginning of a long and profitable investment career rather than being the final destination. Doing so will help you stay on track and ensure the financial health of your investment properties.
Design a Management Strategy
Finally, keep in mind that buying a rental property is only an initial phase. To guarantee that your investment pays off, you need a proactive management plan in place. This is where hiring a great property management company can be beneficial. As local market experts, property managers can help you find off-market investment properties, examine market circumstances, set rental rates, and many more. In truth, as more knowledgeable investors will tell you, the right property management company is an invaluable partner in profitable rental property investing.
If you have found your ideal investment property, guarantee that you find the ideal Chamblee property management team. Contact RPM Greenway at770-771-6102 today!
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