How To Buy A First Rental Property

First time rental property buyers should only buy a property that cash flows.

How to buy a first rental property. Paying cash can help generate positive monthly cash flow. Buying owning and managing rental properties is a business. But buying your first rental property is an even more. As you begin to explore the possibility of buying your first rental property it s important to keep in mind how much money to save for a down payment. I focused on buying cheaper properties.

And the near perfect formula is even more streamlined with companies like roofstock who helps people just like john buy rental properties yup properties that are already rented out so you don t have to find tenants for investment purposes. A looking for an investment opportunity or b apply for pre approval. Ideally you ll want to have a 20 30 percent down payment saved before. Buying your first home has long been considered a rite of passage into adulthood. The best way to limit your risk and increase your odds of success is to make sure you are putting enough money down to be cashflow positive.

Rental properties don t necessarily come with the glamour and huge paychecks that flipping houses is known for but it is a proven method of building multiple streams of permanent income. It s a symbol of financial stability and maturity. It may be a side business for you but you still must treat it like a business. I saved it all combined it with my personal savings and used it to fund more property purchases. It also enables you to weather tough economic times.

In order to rent out a property you ll obviously have to purchase it first. This will be done with a buy to let mortgage which is assessed differently than an owner occupied mortgage. There will be unexpected expenses so leave a margin for error. As with any real estate investment buying rental properties takes a lot of homework. With rental income taxes depreciation and income tax the cash buyer could see 9 500.

Take a rental property that costs 100 000 to buy. First of all we bought our properties near the bottom of the market which means they have already increased tremendously in value. Although we were far from experts when we got started i strongly believe that buying rental properties is one of the best financial moves we have made. As i grew my portfolio i focused on buying properties in the 65k 85k per unit range. Buying rental properties was an excellent choice for us.